Naperville Illinois Real Estate Blog (and random thoughts)

IS HOMEOWNERSHIP STILL THE AMERICAN DREAM? IT IS FOR ME.

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Wed, 07 Jan 2009 18:55:01 -0600

Over the last few months, I have read many articles questioning if home ownership is still part of the American dream. Writers have been debating the advantages of renting versus home ownership. This is probably to be expected considering today's real estate market.

While renting is certainly great for many...

Home ownership is definitely part of this Americans dream!

Let me explain...

Three years ago, my wife and I decided to sell our townhome to finance my new real estate career.

Although our timing turned out fortunate, we were very sad leaving our home. It was our first home together. We loved the neighborhood, loved the home, and liked being a part of a community.

The last few years, we have rented. We have moved three times, renting an apartment, a townhome, and a small single family home.

Life is good. We are very happy, have a beautiful daughter, and another child on the way.

Our financial situation has been improving (finally!), and we are both dreaming of putting down roots...

My wife loves decorating, painting, gardening, entertaining, and cooking in her very own kitchen.

I enjoy snow shoveling, lawn mowing, fiddling in the garage...

We miss having trees. We miss long term neighbors...

Bottom line, we miss owning a home

We dream of buying, and that dream is getting closer every month.

We are both excited.

As a Realtor, I see many homes that I would love to buy. Just yesterday, I saw a perfect home for us. Four bedrooms. Great yard. Big trees. Beautiful neighborhood...

Prices on homes have come down dramatically. What once seemed out of the question, now seems possible.

My goal? To have a great year in real estate and save up enough money for a down payment on a home when our lease is up in November.

A lofty goal? Perhaps...

But a dream that gets me excited to work even harder.

Is home ownership still part of the American dream?

It is for me.

Ken

A Realtor you can trust.

THINKING ABOUT BUYING A HOME? GET STARTED EARLY.

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Tue, 06 Jan 2009 19:15:43 -0600

I have been showing a nice young couple homes the last few weeks.

As many of my buyers do, they did a bulk of their searching online, selected their favorites, and then called me with a list of homes they wanted to see.

All of their favorites ended up being short sales.

Why?

Because short sales HAVE to be priced more aggressively to get an offer.

They do.

Why would any serious buyer deal with the additional hassle of buying a short sale except to save money?

That being said, their is money to be saved buying short sales.

But be prepared...

Normally, a home purchase takes about 30 days.

With a short sale, the closing process will take at least 60 to 90 days. Sometimes much longer.

So if you are thinking about buying a home, get started early.

Their are values out there. They just take a little time.

Ken

A Realtor you can trust.

THE LEADS ARE BACK...MY GROWTHLEADER UPDATE...

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Sat, 03 Jan 2009 19:45:44 -0600

I haven't written anything about Growthleader in a while.

Honestly, I didn't have a whole lot to say...

The number of leads I was receiving from my new website, www.servingnaperville.com, had cooled off dramatically right after Thanksgiving...

But in the last week or so, they have started up again.

Strange.

One week, I get maybe two leads...

The next week, I get two leads every day.

I don't think Growthleader is changing the marketing for my website?

Are you, Growthleader?

But the number of leads I am getting varies tremendously, week to week.

I think the changes reflect overall market interest...

Some weeks around the holidays are big real estate weeks...some are not...

I think business overall is picking up.

My site has been generating about two leads per day.

I expect that to grow into the Spring.

Ken

A Realtor you can trust.

JANUARY 2nd, TIME TO GET BACK TO WORK...DELIVERING KEN'S CARROLWOOD AND RIVER BEND VIEW!

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Fri, 02 Jan 2009 14:21:53 -0600

It's not like I have been on vacation...

On the contrary. I have had several buyer appointments, a listing appointment (which I did get), and two closings in the last two weeks.

Oddly busy, especially for late December.

All that activity is only a byproduct of what I really do for a living...

MARKETING.

And I was back marketing this morning delivering 165 newsletters to Carrolwood in Naperville and 140 newsletters to River Bend in Lisle.

It was 23 degrees today and overcast. Nice weather for my deliveries, although I was a bit under dressed.

My hands were pretty cold!

Although I was dragging a bit from one too many holiday parties, it felt good to be pounding the pavement.

These two neighborhoods have been getting my newsletter for over a year, so the neighbors are familiar with me.

The effects of marketing are cumulative. Not much response from this sort of "farming" right away, but over time, you become the "neighborhood expert".

I am "the expert" in both River Bend and Carrolwood.

There are many neighbors wanting to sell. The real estate market scared them off last year. That fear delays the moving decision, but only for so long, and then...

A rush of real estate activity.

I am marketing in front of that activity.

So I deliver my newsletters.

Ken

A Realtor you can trust.

THE SHORT SALE EXPERT

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Tue, 30 Dec 2008 22:22:29 -0600

As I write the title of this post I chuckle...

"THE SHORT SALE EXPERT"

I am not actually a short sale expert.

Not even close. But I will be soon...

It's a rapidly growing portion of my business.

It seems like every home I show these days is a short sale.

I had a listing appointment tonight. Another short sale.

I expected my business to be nice homes for nice people....

Now, every home is "lender approval required."

I guess I better roll with the punches...

And become a short sale expert.

Ken

A Realtor you can trust.

TWO CLOSINGS IN TWO DAYS?

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Thu, 25 Dec 2008 17:32:38 -0600

I had a closing on Monday, December 22...

And a closing on Tuesday, December 23.

Two closings in two days? Two homes sold?

Two paychecks for Ken???

Holy poop.

Feels good. Very good.

Ken

A Realtor you can trust.

I AM NEVER IN SALES MODE.

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Tue, 23 Dec 2008 17:50:49 -0600

I have been exchanging emails with a broker here in Naperville.

He recently emailed me a marketing piece in an effort to recruit agents for his office.

It was nice...

I have been impressed with many things his office does to market themselves and their properties.

Bright yellow signs. Balloons. Tons of open houses...

Anyway, I let him know I thought he and his company were doing a great job.

At one point, he emailed me and apologized for "always being in sales mode..."

It made me chuckle, because I am never in sales mode.

I'm not.

I am always myself.

Friendly and helpful.

I tell my buyers, "I will never ask you to buy a house."

I never do.

Ken

A Realtor you can trust.

I AM EXCITED ABOUT 2009. I HOPE YOU ARE TOO...

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Fri, 19 Dec 2008 19:34:49 -0600

I AM EXCITED ABOUT 2009. I HOPE YOU ARE TOO...

People do need to move after all...

They do. They always will.

They can put off moves. Delay decisions...

But eventually, life catches up.

And people move.

I am starting to get busy.

I have been showing homes.

People are calling me. People are emailing...

New people.

I have been marketing hard. Ridiculously hard.

It seems to be working...

So I am extremely confident.

I guess that's why I have been hesitant to post...

I am excited about 2009.

I hope you are too...

Ken

A Realtor you can trust.

I FELL NOT ONCE, BUT TWICE...DELIVERING KEN'S WHEATLAND SOUTH, CRESTVIEW KNOLLS, AND HIGH MEADOW VIEW.

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Wed, 17 Dec 2008 22:09:38 -0600

Do I intentionally choose the cold days to deliver my newsletters?

The thermometer never peeked above 16 degrees this week as I was making my deliveries.

And it wasn't the cold, but the ice that presented a hazard.

Last weekend the temps were in the 50s. Lots of rain. Sunday night, as the temps plunged into the teens, a layer of ice was created over Chicagoland.

Tuesday was the real scary day.

Several times I was forced to walk like baby horse taking his first steps...

Twice I fell flat on my back.

Panic really kicks in as one is about to fall on a sidewalk.

Please don't get hurt!

Fortunately, no major injuries.

280 more newsletters delivered.

I am almost there...

Ken

A Realtor you can trust.

THINKING OF QUITTING? TRY AN OFFICE WITH LOWER FEES.

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Mon, 15 Dec 2008 15:42:50 -0600

The other day I wrote a post suggesting agents take a part time job before giving up on the real estate business. I have worked part time as a limo driver during this year to keep my dream alive. I am proud of that...

Another cost cutting move I made this summer was switching real estate offices.

Had I stayed at my old office, I don't think I would still be in the business.

The stress was great. Both financial and emotional.

Despite my efforts, I was never appreciated by my last broker...

And because of the monthly office fees, I was always behind the 8 ball.

A month or two without a closing? Those office fees became very painful.

So anyway, in June I switched offices and joined Keller Williams here in Naperville.

The atmosphere is friendlier and the monthly office bills are non existent.

Much less stress.

So, before you quit, please consider a real estate office with lower fees.

Your dreams are worth fighting for.

Ken

A Realtor you can trust.

IF YOU LOVE BEING A REALTOR, DON'T QUIT!

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Sat, 13 Dec 2008 15:58:42 -0600

I recently read an interesting post by Jennifer Allan.

Jennifer writes how many of her friends in real estate are considering leaving the business due to the hard times in today's real estate market.

She writes how giving up the real estate dream is the option for some:

"I'm not saying that giving up is the only option; of course it isn't. But it IS an option. Don't let your pride, ego or fantasies get in the way of making the right decision for you."

Hmmm.

While I agree with Jennifer that there is no shame in quitting, they don't give out awards for it either.

Look, I understand that real estate is not for everyone. It's a very hard job. I also know that the market has changed dramatically the last few years...

But if you love being a Realtor, DON'T QUIT!

There may be options...

You can take a part time job. It adds to your sphere of influence, puts food on your table, and does wonders for your self confidence.

You will be working hard and chasing your dreams. That's awesome.

So please, if you really love being a Realtor, don't quit.

Find a way.

Ken

A Realtor you can trust.

WHERE DID MY LEADS GO? GROWTHLEADER UPDATE.

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Sat, 13 Dec 2008 11:06:38 -0600

Where did my leads go?

As you may know, I have recently been selected to sample a new lead generation product created by Growthleader. I have been using it for the past 5 weeks.

Just two weeks ago, I struggled keeping up with the flurry of leads I was getting from my new real estate website, www.servingnaperville.com. People were signing up and searching for homes on the site every day. Two, three, even four per day.

And this week...

Only two "prospects". Both with bogus emails.

What would cause this drop off?

Has the marketing of the site changed?

Or did people really stop searching for homes in Naperville last week?

I wonder...

Ken

A Realtor you can trust.

I DON'T BELIEVE IN GLOBAL WARMING!

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Wed, 10 Dec 2008 12:52:14 -0600

I DON'T!

How did the concept of global warming become a "fact" so quickly?

Was it because Al Gore made a movie?

Was it because Leonardo DiCaprio got behind the cause?

STOP THE MADNESS!

I was born in 1968. I was a child during the 1970's. Those were cold years. Some of the coldest years that we have ever seen.

All the kids in my class had "I survived the blizzard of 1979" t-shirts.

There was talk in those days of a new Ice Age...

What happened to my Ice Age?

Look, I hug as many trees as the next guy. I recycle. I love the environment.

But it really gets me steamed watching the politicians push a "green agenda" on the car companies.

Green cars will not save GM, Ford, and Chrysler.

They need to bust the union and start making cars that can compete with the Germans and Japanese.

But I digress...

My brother lives in Austin Texas. It was snowing there last night.

Look, sometimes it is warm...

And sometimes it is cold.

We have all seen the pictures of chunks of ice falling off Antartica.

You know what?

Sometimes ice melts.

I don't believe in global warming...

Do you?

Ken

A Realtor you can trust.

REFERRAL AGENTS?

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Mon, 08 Dec 2008 18:42:58 -0600

What exactly is a referral agent?

It is a new term to me. I have been a Realtor for three years, but I have never heard of a "referral agent" before. That is, until a few months ago...

Have I missed something?

I received a call the other day from one of these "agents".

"Hi Ken. I am still with Keller Williams. But I am in their referral division."

Huh? I didn't know we had a "referral division".

Does this mean they are no longer practicing real estate? That they will now be referring business to active agents? To agents like me?

Awesome.

I could not be more excited about business in 2009.

Ken

A Realtor you can trust.

WHY DO I DO IT? DELIVERING KEN'S LAKEWOOD CROSSING VIEW.

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Sat, 06 Dec 2008 19:20:26 -0600

The thermometer read 16 degrees as I pulled up in my Jeep Liberty to Lakewood Crossing, a subdivision of moderately priced homes in Naperville Illinois.

Overcast. Occasional flurries. Cold.

There was snow on the ground. Not deep. Just enough to make walking treachorous...

I had 365 of my newsletters stuffed inside of my Keller Williams bag.

It would be a long day.

Why do I do it?

I must say the thought has crossed my mind several times. Especially this week.

Maybe I could wait until it gets warmer?

I don't do much business in Lakewood Crossing anyway...

What a silly business plan!

These were my thoughts as I looked at the weather reports. The only day that was available on my schedule was Friday, the coldest day of the week...

I dressed in several layers. Two coats. Sweatshirt. Turtle neck. T-shirt. Sweat pants under my jeans.

I was ready.

But it would be a long day indeed...

Ken

A Realtor you can trust.

IT'S BEEN A QUIET WEEK...GROWTHLEADER UPDATE

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Sat, 06 Dec 2008 16:38:42 -0600

The pace of leads has slowed a bit this week...

After failing to keep up with the deluge of real estate leads the week of Thanksgiving, the pace of incoming leads has slowed a bit this week from my new website, www.servingnaperville.com.

I am still getting a lead every other day or so, but not the pace of more than two per day I had last week.

I have been in the Growthleader program for just about one month, and have received over 40 leads in that time.

I have spoken to a few of the prospects over the phone, and have shown one couple homes from the leads.

Overall, the experience has been a very positive one for me. I like keeping busy, and the program keeps me that way.

I have yet to sniff a deal from my leads generated from the new website, but these are challenging times in real estate.

The weather has turned cold and snowy. Many would be lookers have their thoughts on the upcoming holidays here in Naperville Illinois.

I look forward to reporting the returns from the program in the coming months.

Ken

A Realtor you can trust.

HOW DO YOU MOTIVATE PEOPLE TO MOVE? STOP TRYING!!

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Thu, 04 Dec 2008 18:28:48 -0600

I just read a post by a local Chicago agent Chuck Heaver. In it, he voiced some of the challenges facing home sellers in todays market.

He finished his post with a question: "Any thoughts/tips to motivate people to move?"

My answer. STOP TRYING!

Look, I know many Realtors pride themselves on their sales skills. But...

Moving is a personal decision. A big decision. A decision that should not be taken lightly.

The last thing someone needs is a Realtor trying to "motivate" them.

I just don't think it works. It meets with resistance.

Be available. Be helpful. Be a source of information...

Be the agent a client can trust.

Market harder. Motivate less.

How do people get motivated to move?

Job transfers, divorces, growing families, promotions, job losses, new schools, upsizing, downsizing...

These are the real motivators.

Not Realtors.

Ken

A Realtor you can trust.

PERFECTION IS OVERRATED

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Mon, 01 Dec 2008 19:45:34 -0600

Perfection is overrated.

The concept itself stops more people from trying than anything else.

It was Floyd Wickman who once said, "Anything worth doing is worth doing poorly."

It sounds funny at first. But if you think about it, what he is saying is...

Get off your butt and do.

It doesn't matter if you screw up.

If you blow a listing presentation...

If your open house doesn't go as well as hoped...

If your buyer doesn't turn out to be a buyer after all...

The key is being out there.

Learning.

Improving.

Working.

Striving.

Not whether you win or lose.

Not whether you are "perfect" or not.

Ken

A Realtor you can trust.

I MUST ADMIT, I AM HAVING TROUBLE KEEPING UP WITH MY GROWTHLEADER LEADS...

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Wed, 26 Nov 2008 13:03:33 -0600

I must admit, I am having trouble keeping up with the Growthleader leads.

Not too much trouble.

It has actually been quite good.

Once, twice, maybe even three times a day, I get the text message alerting me of a new prospect. Another individual has registered to my website www.ServingNaperville.com, and they are automatically entered into my Vision database.

The whole system is pretty cool, actually.

The stats are broken down. They expect one closing per 100 internet prospects.

Sounds about right.

Ken

A Realtor you can trust.

"I didn't waste their time marketing myself, I knew it wasn't necessary."

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Wed, 26 Nov 2008 10:10:10 -0600

I just read a post written by the ever titillating Cherimie Crane titled "The Morning After".

In it Cherimie writes of her recent speaking engagement at a marine base in her town of Beaufort, South Carolina.

She was nervous at first. Speaking to 60 uniformed marines would make me nervous too.

But after she started engaging her audience, that nervousness melted away.

Congrats Cherimie!

One line she wrote jumped out at me.

"I didn't waste their time marketing myself, I knew it wasn't necessary."

Hmmm. Interesting.

How powerful.

Imagine if you could have this attitude with every person you meet...

If you could exude the confidence of someone who knows "I am good at what I do."

Powerful indeed.

Ken

A Realtor you can trust.

MY "COMMUTERS" FROM OUT OF TOWN

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Mon, 24 Nov 2008 20:16:13 -0600

They were a nice young couple. I picked them up at the train station on Rte. 59 in Aurora...

It was Friday morning. The weather was cold, but the sun was shining bright. A great day to show homes.

We would be seeing several homes priced in the low to mid 200's. They were in from Virginia, and considering moving to Chicago.

They would be needing a home near the train line for the commute to Chicago.

The search was fairly challenging. We would only have two to three hours. The couple did not know the area at all.

We started in Lehigh Station. It is located on the edge of Aurora, right next to Naperville. The townhomes are nice, but have been a tough sell for the builder who started the project during the market boom.

But they are nice, a short drive to downtown Naperville and priced roughly 20-25% below the original builder prices. Fairly spacious...

Anyway, I showed them the builders model. It was loaded. A real fun show, with huge windows and still fully decorated. It was priced at $279K. High end of our range. Doable. But certainly a stretch.

We then moved our search to Lakewood Crossing. Naperville. Good location.

I showed them one of the best deals in Naperville. Further from the train. But still real nice. Corner lot. Not for those that must have their privacy. But very nice layout. Single family. Open kitchen. 3 bed, 2 and 1/2 bath. Unfinished basement. Priced at $275k.

Could probably be picked up at a nice price...

Buyers loved it. But probably too far from the train...

We drove through Maplebrook, and then Springhill.

Neither were quite right...

They really liked River Bend. Located in Lisle, the townhomes are a short drive to downtown Naperville. Very nice.

I showed them a nice end unit. Big windows. Basic. But very clean and nice. They were asking $285.

I think that is the home these buyers would pick.

But there still are plenty of hurdles to clear before this couple would become clients.

They appreciated my time, and liked my tour, but...

They have not even been offered the job yet. At the earliest, they would be moving in April.

Patience is key.

Ken

A Realtor you can trust.

"HOW DID YOU GET INTO REAL ESTATE?"

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Sat, 22 Nov 2008 13:30:50 -0600

I was driving the black Lincoln Town car home from the airport last Sunday. I was driving my passenger, a dentist, to his home in Bolingbroook...

It has been months since I last drove a limo, but my buddy Chris needed a driver, and I can use the cash.

"How did you get into real estate?" the dentist asked...

"About 5 years ago, my wife and I considered selling our house," I began.

"We decided to try it ourselves, and we put our home on the market For Sale Buy Owner (FSBO).

"I loved it. I loved showing the house. I was proud of it and the neighborhood.

"I would stalk slow driving cars in front of my house. I would drag the drivers into the house for a "showing".

"Neighbors would tell me, "Boy, Ken, you should be the Realtor for the whole neighborhood!"

"Ding Dong! The light went off. That is when the dream began...

"I never actually sold the home. I was a typical FSBO. Overpriced.

"I guess I didn't really want to leave Chicago...I knew what I wanted to do," I finished.

"That's cool," said the dentist.

With that, we drove off in silence down the dark highway...

Ken

A Realtor you can trust.

-Look close. You can still see the yellow FSBO sign!

WHY DID I LEAVE FINANCIAL SALES?

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Fri, 21 Nov 2008 18:50:25 -0600

After graduating from the University of Illinois in 1990 with a degree in finance, I followed my two brothers into a job as a stock broker.

It was fun at first....

Even as a $5 per hour "caller", it was exciting to put on a tie, take the train down to Chicago, and walk into the financial sector working for Lehman Brothers, sack lunch in hand.

Just being down in the Loop, you felt like a "player"...

The hours were long and painful. Dialing number after number. Our goal was to get a wealthy prospect on the phone. When we did, we would hand off the phone to a senior member of the sales team.

Hour after hour, we would hold the phone to our ears battling with wives and secretaries.

Very unpleasant work.

We didn't even get to make a sales pitch...

Anyway, after a couple years the money started to flow.

Those were fun years. We were all young, making 6 figures, and partying hard...

I drove a Porche 968. Then a Mercedes SL 500.

Fun years indeed.

But shallow. And stressful. Always stressful.

I never really liked what I did. I was OK at it. But I never loved it.

I am glad I have left it...

I love what I do.

Ken

A Realtor you can trust.

HAVE YOU HUGGED YOUR BANKER TODAY???DELIVERING KEN'S SPRINGHILL VIEW...PRICE REDUCTION ON ALAN ROAD

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Thu, 20 Nov 2008 16:36:11 -0600

I recently made a new contact with a mortgage broker at Chase Bank here in Naperville. New contacts are always good.

He was having his first child this November. He was excited.

He had called me from one of my newsletters. I had been marketing his neighborhood. Anyway...

He was excited to hook up with a Realtor. He wanted us to host "open houses" together at his branch.

Sounded cool for me. Me in a branch on Saturday morning serving donuts and coffee? The Realtor of choice? Endorsed by the bank?

Sounds perfect.

Yesterday I found out my mortgage broker had been laid off...

Cold. Windy. Overcast. Occasional snow flurries.

Those were the conditions I faced today delivering Ken's Springhill View.

I set a personal record. 365 copies hung on every door in Springhill, a subdivision of modestly priced homes located just a mile and a half from downtown Naperville.

I enjoyed delivering today. I have been busy with work as well as chasing Erin around, so I need to set larger blocks of time for the newsletter.

I felt excited. Business seems to be improving...

I felt proud. I was working. Three solid (and cold) hours spreading my brand. That's quality marketing time.

That feels real good.

I am still on my plan.

My seller for my new listing on Alan Road just called. We spoke for about 5 minutes about the decline in the stock market and the economy.

At the end of the call we decided to lower the asking price from $319,900 to $299,900.

That is very exciting to me. At this price point, it will be compared to homes in the $250,000 to $300,000 range. That is a great comparison for our home...

It is on 2/3 of an acre in South Naperville. Great layout. Needs about $50,000 of love to be a gorgeous home.

Ken

A Realtor you can trust.

KEN'S SOLUTION TO THE HOUSING "CRISIS"

Ken Tracy Realtor Naperville Illinois Real Estate (Keller Williams Naperville) — Wed, 19 Nov 2008 07:53:19 -0600

I have written about the imbalance of supply and demand in the housing market for several months.

Today, the supply of homes on the market far outweighs the demand. As a result, home prices must come down.

They must. And they have.

Prices will continue to drop as long as there are more homes to sell than buyers for those homes.

The government is making a great effort to encourage new demand for homes. They are currently offering tax incentives for first time home buyers, and those incentives will probably grow.

These efforts will help, but only slightly.

Imagine, for a moment, that you are the housing market. You are lying in a bathtub, and the water is almost over your head.

That is today's housing market. It is drowning in homes for sale.

The government is doing all they can to lift you above the rising water. Why not? Surely, that will prevent you from drowning.

But lifting you is difficult. You are very heavy and the water is high.

The problem is not that you are in the tub. Baths are very nice, afterall.

The problem isn't even that the water is too high. You are still above water, so you will not drown at current levels.

The problem is that the water is still running.

The tap has not been turned off!

I believe in free markets and capitalism. I am concerned with the government's growing involvement in the markets.

Capitalism has a way of solving economic problems. Those ways are not always pleasant. Sometimes they are very painful.

But they are very efficient.

Home builders are still out there building new homes every day. In this market, I find that unbelievable.

Why are they still building homes? Don't these companies know that they can't sell them at 2005 prices?

They are still building homes because they are home builders. That is what they do.

They are lobbying the government (along with the Realtors) to encourage demand for homes.

Please, government, stay out.

Capitalism will solve this supply/demand imbalance.

Do we need Ryland Homes, Toll Brothers, Town and Country, and D.R. Horton building 800,000 new homes this year?

In today's market? No way.

Capitalism will solve this problem.

These companies will go away soon. Very soon.

Supply and demand will come back together.

Ken

To find your next home, go to my Naperville real estate website anytime.