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Real Estate Broker/Owner with Real Estate Training Academy - Real Estate Education

Today will be the first Sunday that RETA is on 1570 AM from 3:00 p.m. to 4:00 p.m.  Leon Knott has a weekly 1 hour spot on the "Ask The Expert" series and he has asked RETA to join him.  Leon is known as "The House Man" and has been in real estate over 25 years.  The radio show covers a variety of real estate topics and since RETA offers training and education in numerous real estate careers it has the makings of a good match.

The upcoming classes will get mentioned and hopefully that will lead to increased awareness and enrollment for the school.  The public has the opportunity to call in and ask questions on the show.  Leon, with his vast experience in listing and selling properties, and Joe Paris with years of experience as an appraiser and real estate instructor should lead to more questions on different topics.

The public has an appetite for information on real estate.  Why shouldn't they, real estate is usually the biggest investment people make and many people dream of a better home in a nicer area.  The current market has peaked many peoples interest for information on reposessed homes.

Signature Real Estate was in the paper today with their bus tour.  The Journal reported that they sold out the first tour and had to turn people away.  They sold out two more tours this weekend as a result according to the paper.  The public needs an outlet for gaining information on real estate.  When shown how to take advantage of the buyers' market many will.

The real estate market is potentially the easiest fix of all of our problems.  Face it, no matter what we do we won't see a big change in global warming and the talking heads say the terrorist threat won't go away for decades.  The real estate market in most parts of the country is depressed, and in our area it is definitely suffering for the segment of the market trying to sell.  That segment is just 1/2 the market though and the buyers sense that now is a great time to buy; so lets' make that as easy for them as we can.

The market is bad if you are selling, primarily because of the inbalance of supply vs demand.  This is true with any commodity isn't it?  The old saying perception is reality plays a big part in what happens today with our market.  The focus needs to switch to the solution rather than the gloom and doom of over supply and lowering property values.  More articles need to emphasis the other side of this coin, which is what I am doing here.

Text books say that a market in balance has slightly more supply than demand.  The questions are, what is the approximate number of homes that would constitute a balanced supply, what are the number of homes on the market that exits today, and what can be done about the over supply.

We know going in there is an over supply, even the most optimimistic person has to start with that premise.  Searching the MLS today I came up with 6,730 active listings in The Flint Area Association of Realtors (FFAR), for all counties.  There were 5,194 listings in Genesee County alone.

I have found that people tend to think that there are hardly any sales occuring.  When people come to my office and express that thought I take them right to my computer and bring up the number of pending sales.  The number amazes them because of their perception of reality.  Today there were 781 pending sales for all counties and 610 pending sales in Genesee County, on FAAR.  The pending sales represent about 11.5% of the active listings in both categories.  Many businesses would love to see that happening to their inventories.

If we focus on Genesee County, it would be nice to know what number of listings would constitute a balanced market.  The number of active listings reported today was 5,194.  For the sake of argument I am going to say between 3,500 and 4,000 active listings would be a balanced market.  If we take the high number we are looking at about 1,200 excess homes.  I contend that selling 1,200 homes is not that difficult; not like solving glabal warming or terrorism.  Keep in mind that 1,200 homes will sell normally in a 3 to 4 month period  We need to pick up the pace by selling the normal amount of homes plus the excess to bring the market in balance. 

Why is this possible?  Two reasons come to mind, first of all housing is a necessity, unless you find a nice overpass you are willing to live under.  The second thing is, we aren't making any more land and houses aren't popping up out of the ground to satisfy the needs of the over 400,000 people that live in Genesee County.  Genesee County is the fifth largest county of the 83 counties in Michigan.  We have to have a lot of homes on the market at any given time just for that reason. 

Demand for housing is always there but with the gloom and doom we have been hearing no wonder people are hesitant to buy and I think that leads to pent up demand.  Many of the procrastinators will be able to say years from now what "they could have bought a certain house for in 2008." A few years from now I would rather have them say "I bought this house in 2008 and I'm glad I did."  Do you think that there may be 1,200 additional buyers out there that this could be true for?  I do!!!

If you live in Genesee County you have experienced plant closings and tough times.  The old saying is that tough times don't last but tough people do, may be as true here as anywhere.  At one time we had seven plants going full tilt and Genesee County was one of the highest per capita earnings places in the country.  When G.M. closed most of the plants we should have folded then, but we didn't.  In fact, we survived quite well and if you look at some of the commercial building and expansion going on you have to wonder why? 

I don't claim to be the an economist but we all have a right to apply some common sense to this.  The people that invest in commercial building, like the big box stores usually know what they are doing.  They rely on professional studies of areas before they invest.  It doesn't take a lot of suffistication to know that markets cycle.  I would assume that the market studies done for the big companies that are moving in or expanding show pretty good overall strength in the community given its' demographics and financial base. 

Given the choice of the gloom and doom we hear so much of in the news, and some of the positive things we can see for ourselves, we need a balanced perspective.  The glass is either half full or half empty depending on your outlook, just make sure you don't ignore both sides of the issue.  If we, in the real estate community can be the difference makers in selling off the excess inventory the economy will come around that much faster.  The National Association of Realtors advertises that real estate is local.  Well, lets' choose not to participate locally in a bad real estate economy and fix it by selling more homes, especially repo's.

One last thing.  Remember 'Buy American' can't be done any better than buying real estate.  First of all your actually buying part of America, and secondly try to think of a product that leads to more economic stimulus in a community.  When a sale closes look at how many people get a pay chech.  The agensts and brokers, the title and insurance company, the appraiser and surveyor, just to list a few.  Once the new owner gets' moved in they are off to local stores to purchase the things they need to make the new house what they want it to be.  Better yet, they may have sprung a seller loose to start the process all over. 

If you get a chance toon in to 1570 A.M. and listen to the Leon Knott "Ask The Expert Show" each and every Sunday from 3:00 - 4:00 p.m.

         

Comments (2)

Greg Hampton
Re/Max Around The Mountains - Blue Ridge, GA
North Georgia Mountain Property,Blue Rid
I would be willing to listen to any expert,but where do get an AM radio.
May 04, 2008 04:34 AM
Joe Paris
Real Estate Training Academy - Real Estate Education - Burton, MI

Greg,

Your car radio can get AM stations but we are in Flint Michigan so you may not pick us up.

May 04, 2008 05:14 AM