REAL ESTATE MARKET PROJECTIONS? FACT OR WISHFUL THINKING?
Here is where it is at folks! A reality check shows a long recovery that probably will be unprecedented. Numbers at the end of the year should give us a good idea of the Shadow inventory. If we only new how many ready, willing and able buyers were also out there, we could project an absorption rate and a recovery date.
TAKE OFF THE ROSE COLORED GLASSES and PREPARE FOR REALITY.
John Mulkin provides another thoughtful analysis of the real estate industry in his accounting of his 2010 predictions. As always, a worthy read for members who want to know the facts. See: Housing and Economic Predictions for 2011 and Beyond
John isn't projecting a positive financial picture for the real estate industry for 2011. I agree and believe that it will be many years before the real estate industry will be positive.
AGENTS MAY WANT TO TAKE JOHN'S thoughtful analysis and prepare. For years now we have advocated using a business plan to help manage your business. Now, we need a BUDGET PLAN to help manage our resources.
The RETRACTION evidenced by sales volume has it's foundation in the uncertainty and lack of confidence of the average consumer AND the RETRACTION in the numbers of home buyers in the market. The old "rosy scenario syndrome" is misleading and could lead to financial ruin for many real estate agents and brokers.
Agents and brokers plan their budgets for advertising and promotion based on projected sales and commission receipts. By publishing positive sales and growth projections, we grunts in the real estate industry could be encouraged to dissipate our limited resources chasing business that doesn't and isn't
likely to exist for some years to come.
If anyone is familiar with new construction sales, you know that builders are quite likely to raise base prices of their models after booking 1-3 sales contracts. Do they seriously believe that a sale or two or three is hard evidence that the market is now roaring into positive territory???
Plan for no growth and your resources will last longer. Real estate agents and brokers and the NAR need to learn to see what is and not what they believe will convince consumers that "it's a good time to buy." Is it a good time to buy?? Sure it is. THAT IS GOOD NEWS FOR THE CONSUMER. However, when we publish market reports that show a modest gain in home prices, we don't always publish the concurrent reduction in sales volume.
I believe we're in for tougher times than most expect because we're not getting the facts from NAR, which speaks for our industry.
They have yet to publish a word addressing the percentage of would be home buying consumers with credit damaged by foreclosure, short sales, unemployment and bankruptcy. Take those consumers OUT OF THE REAL ESTATE MARKET and what then would the sales projections be????
Many consumers will be OUT OF THE MARKET FOR 3-7 YEARS. The NAR and the federal and state economists are using OLD and IRRELEVANT financial models to project future real estate market growth. By using gross population numbers to future sales and growth, they have failed to account for the MILLIONS of consumers will will not be able to buy a home for some years to come.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.
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