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7-26 Inman Panel #2
A couple days ago I
posted a blog from Inman
Connect on their panel 'Housing
Debate: Bull vs Bear' in which the bears were goring each
other to see who could out-bear the others. It was a bloodletting of
epic proportion and I disagreed with much of the content as not being
relevant or, in some cases, even accurate.
Yesterday
(Friday) the last panel discussion was devoted to 'What's
Next: When Will The Housing Market Turn?' It was, in my
opinion, a much improved presentation and even though the speakers were
not universally optimistic, they were all real estate specific and not
alarmist, which was the problem I had with the earlier panel - trying
to extrapolate general economic condition to a 'national' real estate
market.
 Panelist Patrick Stone of The
Stone Group suggested that about 1/3 of the country has
already turned the corner (or never had a corner to turn), another 1/3
will turn within the next 6 months and the last 1/3 will turn the
corner within a year. He noted that contrary to the media notion of a
'national' housing market, all real estate is local (as we all now) and
that there are markets that never declined, some that have dropped but
started back up, some are just hitting bottom right now and others that
are just starting to drop. Each
market will have to rely on LOCAL expertise to determine
when the bottom has been sounded and how the recovery will proceed.
 Alex
Perriello, CEO of Realogy Franchise Group, was even more
specific stating that 'The
market is what it is and it will be what it will be. It's what we do
with it that's important.' Noting that 'Hope is not a good business
plan', Perriello went on to site 5 steps that we all should
take right now to increase our positive impact on the market. Since you
didn't attend, I'm not going to share those 5 things with you but
needless to say they are earth-shattering. (Actually, I'll share them
in a later post). Perriello stated that in his opinion it's too early to
call a bottom to the current market but noted that some of the earliest
and hardest hit markets, including areas of California, have already
started to improve. But since price is driven by inventory we
will likely be dragging along a 'sloppy or rocky' bottom for awhile,
maybe a long while, before we see any significant price improvement.
Perriello also cautioned against relying on 'irresponsible journalists'
who give us eye-catching negative headlines not supported by the data
in the body of the article.
 Joel
Singer, CEO of the California Association of Realtors,
confined his comments to his knowledge of the California market as a
tribute to localism. In Singer's opinion, we have hit bottom in the
Golden State but it will be a long plateau with very slow
growth. He noted that unlike past housing cycles which trickled
downward over the course of four or five years, this cycle literally
'exploded' downward, meaning we hit the bottom much quicker and he does
not believe we are in for the prolonged decline forecast by the
previous panel. Mentioning the same trek across a rocky bottom, Singer
urged listeners to go behind the top line numbers reported in the media
and get the facts behind those numbers. For example, California's
inventory has dropped to just over 7 months since Q4 07. While way off
the 2 month pace of 2005-2006, it's still an improvement over the 11+
months it reached last year and is even an improvement over the
recently released national average which has climbed to 10 1/2 months.
 Jonathan
Miller of Miller Samuelson, Inc. noted that what's
scaring buyers right now and keeping them on the sidelines are the
national statistics, which are often mis-stated and more often have
nothing to to do with our individual local markets. Citing his local
New York market, he noted that some areas have continued to appreciate
while areas as close as 2 blocks away have fallen on hard times. For
that reason he doesn't
foresee a 'national bottom' that we can all point to as
being the definitive end of the current cycle but he believes we'll experience a series of
local bottoms with that process extending over the next 12
- 18 months. Miller also noted that in his opinion the credit pendulum
has swung too far and is also making it difficult for some well
qualified buyers to enter the market. 'When you've got somebody with
FICO's in the low 700's, good income and a steady job who can't get a
loan for an entry level home, there's a problem with that system which
will take some time to sort out.'
As
always, I applaud Brad Inman for the diverse, high level and high
energy group he brings to his Connect events. As with any group like
this, there'll be some hits and some misses and I (as well as many of
my colleagues) felt this latter panel was a definite hit even though
they weren't as optimistic as we might have hoped. (Remember: Hope is not a good business
plan). Overall the event provided some healthy doses of reality and
exposure to some cutting edge technologies that you will
be hearing more about during the next few months. However, as Inman
pointed out, while many of these start-ups have great ideas, they are
all relying on Realtor dollars to fund their success at a time when
Realtor dollars are in short supply. It may not bode well for some of
the fine folks we met last week but we applaud their spirit.
Gene
Wunderlich - Selling Southwest California Homes including
Temecula, Murrieta & The Southern California Wine Country
Remember, Don't wait to buy real
estate - Buy real estate and wait.
THE
OPINIONS IN THIS
COMMENTARY ARE STRICTLY GENE WUNDERLICH's PERSONAL OPINION. WHILE ANY
REASONABLE &/or RATIONAL PERSON SHOULD AGREE, THESE VIEWS MAY
NOT
REFLECT THOSE OF ACTIVERAIN, COLDWELL BANKER RESIDENTIAL BROKERAGE OR
ANY LOCAL, STATE OR NATIONAL ASSOCIATIONS.
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Realtors®
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The Lounge at Active Rain
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The Economics of Real Estate
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Coldwell Banker Group
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The Optimist
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3 Comments on Inman Panel Focuses on Localism for Recovery
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Gene Wunderlich - Realtor®, Government Affairs Director
Temecula,
CA
More about me…
Southwest Riverside County Association of Realtors
Office Phone: (951) 894-2571
Cell Phone: (951) 205-1911
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;)
;)
I'm glad that you posted this. I had to check out and get to the airport and wasn't able to catch the last session. I did make it to the Bears and more Bears bloodbath, though...