Lately it seems that all we hear about is the doom we're facing...oil prices are out of control, sub-prime lending has disappeared off the face of the earth, the stock market is unstable, foreclosures are through the roof, we're in a declining housing market, and so on, and so on, and so on. But are we forgetting that "every cloud has a silver lining", that "from all bad things, something good comes of it", that "everything happens for a reason", that "justice conquers all".
When I got into real estate in 2004, I had no idea, that this would be such a tough industry to master. I thought that I would just get my license, sign up with a brokerage, and become a millionaire in a year or two. After all, I was a well liked, highly spirited, and I might add a "very successful" director of banquets in the hotel hospitality industry, how hard could it be to sell real estate. Little did I know I would be facing my own private little doom, yes, I fell right on my face. But I learned. As cliché as those sayings that I listed above are, I really do believe in them, and since I love this business, I choose to review my past failures, learn from them and move forward.
So, let's take a look at the doom we're facing, the bad and good that could come of it:
High Gas Prices
This is a tough one; nobody wants higher gas prices, right? What I can't figure out, with prices soaring over $3.00 a gallon, why are there so many SUVs, mammoth 4 wheel drive trucks and high powered sedans and sports cars speeding down the roads? They can't all belong to REALTORS. Well, this is America, and Americans have always loved big high powered vehicles, its part of the American dream. If we lose this privilege, a little of our confidence goes with it.
The good news is the auto industry is restructuring their way of thinking and coming up with better ways to build those big cars with cleaner burning and more efficient engines. So, I'm sure that the future outlook in this area is on the road to recovery.
The other good thing that came from this is that Al Gore was able to find his niche that made him the billionaire that he is today. I was beginning to worry that his confidence was shot forever.
Subprime Loans
Okay, so I lied, not all subprime lending has disappeared, just the bad ones have. That's a great thing. Yes, we all want to live in million dollar homes, but not if we can't afford it. This is what has lead to the high foreclosure rate of today. What a hard lesson to learn, but none the less, one that had eventually come to pass. I think we all knew it was going to happen sooner or later, but we were all so caught up to the housing gold rush that we just simply chose to ignore it. Sure we all warned our clients that interest only loans were only good for short term investment, but how were we to know that we were going to go from a booming profit turning machine, to a dead stand still, and finally, a declining market, all within a year.
The good news is that this is now behind us and those FHA loans of the past, were carefully wrapped and tucked away for just such an emergency. This is definitely a better and safer loan for the low-and-moderate income family. They carry much favorable interest rates and they have infrastructure already set up for counseling and loss mitigation.
Unstable Stock Market
This is hardly a problem for the average consumer; in fact the stock market is not an enemy of real estate. The latest NAR research on vacation-home buyers reveals that many of them rely on stock market wealth to fund that second-home purchase. The stock market may appear to be unstable but it's also at an all time high. For the rest of us we need to focus on our local economy, the job growth. The sound local economy has been the principle reason why home prices have largely held on average for Maricopa County
Foreclosures
This has definitely put a damper on home values in the Phoenix Valley, its causing sellers a lot of frustration. The impact became definite in the fall of 2007, forcing sellers to lower their prices to compete with the foreclosure property down the street that sold for thousands less than their asking price. This is just going to have to run its course. Uncle Sam has provided some relief to homeowners facing foreclosure, by eliminating to capital gains tax on short sales, but we're just going to have to wait and see if that produces any favorable results.
The good news here is that it may be accelerating the declining prices, so hopefully, those qualified buyers and investors will get off the sidelines and scoop up these great deals, and ideally decrease our 18 months of inventory to a more negotiable level, one that is fair to the buyers and the sellers. Now that would be niceJ
The lack of buyer confidence to enter the market has been the one principle reason in holding back home sales. The qualified buyers are afraid of a possible price decline. And the media is fueling that fear. It's crucial that we talk to our clients, family, friends and everyone we come in contact with, and educate them on the dos and don'ts of real estate. People are naturally afraid of the unknown, if we're upfront and forthcoming with our prospects, maybe, just maybe, the buyer confidence will be stored at a faster pace.
Now, let's get out there with our shiny, smiling faces, inform all the good people of America that it's a great time to buy a home.
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