Real Estate Blog - SURVEY SAYS! THE HOUSING INDUSTRY IS IN RECESSION. WHAT ARE YOU GOING TO DO ABOUT IT?

Home : Blogs : Lenn Harley, Real Estate Broker, Maryland & Virginia : Lenn Harley, Broker, Homefinders.com in Maryland and Virginia

SURVEY SAYS! THE HOUSING INDUSTRY IS IN RECESSION. WHAT ARE YOU GOING TO DO ABOUT IT?

* * * * HARD CORE REAL ESTATE TALK * * * *

REAL ESTATE AGENTS AND BROKERS NEED TO GET A GRIP ON REALITY AND LEARN THE FACTS ABOUT THE HOUSING INDUSTRY IS IN RECESSION. BY ALL LOCAL AND NATIONAL NEWS REPORTS, IT IS REAL.

A recent opinion based survey conducted by INMAN on December 1st shows that I am not alone in my opinion that the recovery from this housing industry recession may take several years.

However, I don't rely on opinions or platitudes. I rely on FACTS.

My word means everything in the world to me. I will not mislead the consumer.

FACT OR FICTION? It is not in my nature to harp, kick that dead horse, or be pessimistic. However, when it comes to the housing market and the real estate industry, I rely on HARD CORE REAL ESTATE. I RELY ON MY OWN RESEARCH of the FACTS. Numbers do not lie.

Property values are down.
Sales volume is down.
Consumer traffic is down.
Unemployment is up.
The economy is in recession.

Relating the above isn't pessimism. It is the result of reality based observation of the facts of my market which is Maryland and Northern Virginia. Thanks to ActiveRain, I also have a window into local markets across the country.

OUR BROKERS CAN LEAD. For the survival of agents in our business, it is critical that brokers come to grips with reality. If the agents and brokers who interact with the public continue to present a rosy picture to the consumer, we will lose all credibility with the home buying and selling consumer. We sold a lot of real estate when home prices were escalating faster than the contracts could close and buyers were realizing a 20% gain the next year. We can also sell a lot of real estate today, if we accept the fact that the housing industry is in recession and use that information to formulate our personal business plans.

TURN THIS HOUSING RECESSION INTO OPPORTUNITY TIME.

If we face reality and understand that the housing market is a reflection of the national economy, we will have some credibility throughout the recovery, when it comes, and it will come.

FACT: The economy is in recession.

FACT: The housing market is in recession. Foreclosure sign

FACT: Foreclosures and short sales are an increasing percentage of active listings of homes for sale and and will continue to increase as home valuations continue to fall, unemployment continues to rise and the government continues to rescue the banks and Wall Street and leaves the average home owner to fend for themselves.

FACT: Americans are a home ownership society. Paying rent on property owned by investors is not an attractive proposal to most consumers. Even if home owners understand that they will not realize high equity gains for some years, owning a home offers a quality of life that Americans desire. We're an independent society and having control of our home drives many home buyers.

FACT: Many home owners will be unable to sell their homes because the property will not appraise for more than market value which, in many cases, is far less than the mortgage balance. The move-up market is non-existent for the vast majority of home owners. Since the move-up market has historically been a large percentage of real estate sales, agents and brokers need to focus marketing dollars and energy on alternative market segments. That fact will result in fewer sales and reducing sales dollar volume. This will also probably result in a reduction in the numbers of licensees competing for the reduced number of home buyers.

FACT: Relief from the government will be targeted to segments of the market that are already in distress leaving millions of home owners hostage to a property with a mortgage balance higher than the market value of their home, making sale of the property impossible.

ALL OF THE ABOVE CANNOT BE SUGAR COATED BY REAL ESTATE PRACTITIONERS.

However, real estate agents and brokers can survive the market recession if we are smart and quick on our feet. How?

1. Sell those foreclosures. First time home buyers and buyers looking for good prices are excited about the discounted prices offered by foreclosed properties. Many of the foreclosures on the market today are in locations and communities popular with home buyers. Learn how to prepare our buyers

2. Sell short sales. These properties are discounted and the appraisal are a guide to the bank's willingness to accept far less than present day market prices.

3. Sell financing. Look for marketing opportunities with special financing for home buyers. First time home buyer financing can make sales happen. Research grant programs for lower income buyers and first time home buyers. They are out there.

4. Research loan officers. Form relationships with lenders who are willing to offer special financing opportunities for your home buyers. If a loan officer or mortgage company is not willing to help find more than the usual financing, find one that will.

5. Get a grip on your market. Last year's market is gone. Accept the fact that our average sale price is going to be reduced dramatically for the foreseeable future. Homes that were selling for $450,000 3 years ago are now selling for $300,000. Expect to have to work harder to maintain gross sales volume with the reduced sale prices.

6. Examine your household budget. It may be necessary to adapt a more modest life style to survive as a real estate sales person in this housing recession.

7. Learn from the success of others. Bryan Tutas has, in the two years I've known him, changed his broker model at least 3 times. Broker Bryant's advice is hard work.

WHAT IS YOUR JOB GOING TO BE IN 2010? We, real estate agents and brokers, can survive and thrive this housing recession if we are smart, know the market and be willing to do what works, not necessarily do what we have always done.

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988, E-Mail.

Posted by Lenn Harley, Real Estate Broker, Maryland & Virginia on 12/06/2008 09:09 AM

Comments (86)

Real Estate Market in the ActiveRain Channel

real estate market

Post is included in group: Real Estate Trends
Post is included in group: Realtors®
Post is included in group: SubPrime Loans and the real estate market.
Post is included in group: The Ninety-ninth Percentile

86 Comments on SURVEY SAYS! THE HOUSING INDUSTRY IS IN RECESSION. WHAT ARE YOU GOING TO DO ABOUT IT?

DEC

I agree 100%. Im not painting a rosy picture for anyone. Its not rosy. This has been a hard year and I have had to make lots of changes to adapt.

Lenn,

Thank youu for the straight talk!! I really like the HOW TO's in your post they are straight and to the point. We are all well served to listen to what you are saying.

MUCH good advice here, and the keywords are probably "work" and "fact". It's up to agents to address the "facts" of the market with our clients and consumers in general, because sugar-coating won't help any more than getting depressed about them. And we have to do whatever it takes to address them, following your brillian seven suggestions - i.e. WORK at it. Real estate success is not going to come easy for us or our clients for the foreseeable future.

Good morning Lenn...You are the Yoda of AR...(but in no way look like him :) :) My brokerage ( a small independant) has laid off pretty much all of their office staff.....me thinks the ship is sinking..:) I have always been on my own, working hard, trying to find ways to adjust....

Lenn - no nonsense, no bull........just the facts. it would seem rather clear cut what any broker or agent should be doing now. one of your most insightful statements ..."If the agents and brokers who interact with the public continue to present a rosy picture to the consumer, we will lose all credibility with the home buying and selling consumer."

The loss of the credibility will continue to fortify the wall that is growing between consumers and real estate agents.

Lenn, Of course I agree with everything you have written. Everyday I hear agents say that things should turn around shortly. WRONG!!!! We are going to be in this slump for years!!! 2009 is going to be brutal. BUT, at least in my market, homes are selling. Prices are way down. I certainly don't need to tell you, but for others, prices in my market are already back to 2001 values!!

I priced a house yesterday at $89,000. It was bought new in earlier 2006 for............$310,000!!! That's the reality from ground zero.

Laura. Good for you. This is hard stuff to write, but sometimes I get a bit tired of the "half full" claimes. The glass is 3/4 empty.

Bryant. Thanks. I stay on top of the Central Florida market, thanks to your posts. In our market, we sold a town home in Woodbridge Virginia for $180,000 that the owners paid $395,000 for new in 2006. Our market isn't as vulnerable to market declines as many, but the problem of upside down homes is just paralyzing our home owners.

Don. Nothing but the facts. How can agents plan when they think everything is going to turn around in 3 months???

Margaret. Thanks. Sure, the facts are what they are. But, there are opportunities.

Konnie. Same here except that I changed by broker model in January 1, 2007. I saw it coming and stripped myself of all overhead.

John. Folks read. When the Washington Post says the real estate industry/country is in recession and an agent says everything is fine, then prices fall another 10% and the buyer can't get a loan????????

My word means everything in the world to me. I won't mislead the consumer.

Yeah for you Lenn. You are right on. Why sugarcoat all this? You are totally correct. I love your very hard cold realty approach cuz everyone dilly dallies around it. But not you. Thanks a bunch.

Lenn,

This has to be depressing to the incompetent and the mediocre. To bad, there are a lot of nice mediocre salespeople and they've done well in recent years.

It's going to be hard on the seasoned pro's, but they'll succeed, if they adjust to the current market, changing their business model. There is all ways profit in solving problems, and there are allot of consumers with real estate problems.

It's the consumer I feel sorry for, many are going to lose money, many are going to lose opportunities. We can't save all the money, but the competent pro can limit losses! The competent pro' can also provide access to the abundant opportunity available today.

This post should be mandatory reading for real estate people!

Bill

Kathy. The truth will set you free. We need facts, not surprises.

Bill. Thanks. I agree. I also feel for the average home owner who sees their equity disapparing as we speak.

Lenn, it's not the same job anymore. Once that's an accepted fact, it's much easier to take the excellent advice offered above (although I've found the transition painful, as I'm sure many have).

Bottom line: working with what IS, and paying attention, will do far more in the long term than pretending that we're in a hiccup, when we're mid vomit. If nothing else, the experience of reinventing what our benefit to the market is will offer sustenance until things return to a less surprising venue. It's also an opportunity to interact with people and actually help, which intentional ignorance for the sake of a "positive attitude" won't.

/they keep saying it is going to get worse before it gets better, some saying mid 09, some saying the entire year.....I will hang in there and ramp up efforts!

Lenn, I listed a short sale about 8 weeks ago. I kept bringing it down until I hit the sweet spot. Got 2 offers, submitted them both with EVERYTHING is order, didnt' omit one piece of paper. I even included all my marketing, and everytime a price reduction was taken.

They called me 4 days later to tell me they had received it. She has sent out the appraisers BPO's. Yesterday, she emailed me. Did I say SHE, not me.

It is 100K below the mortage. She told me she would let me know by the 9th.

Now, I have not made one phone call to them. Just been patient.

I sure hope this is a sign of banks changing and being more pro-active. I had given up on short sales because you just never heard. I think the amount of homes they are getting back in foreclosuere are just beyond what they can handle.

Fingers Crossed.

Oh yea, it is Wells Fargo who I am working with.

Hi Lenn,
The facts are not pretty and are definitely hard to swallow for everyone but in order to survive, first we must understand and accept the reality. Being the bearer of bad news is never an easy role, but educating our consumers is essential.

Since consumers tend to not trust Realtors to begin with, I agree that we can't sugar coat the situation, people value honesty. I also feel there are so many great opporunities for buyers right now, so longs as they qualify for financing. (I am all for people buying houses they can actually afford!!)

You are always right on and to the point. I appreciate it and agree with your post. It helps me stay focused on the need to adapt to stay alive. Thank you

Lenn...

This is a very realistic presentation of the realities of the market.

As a matter of fact, it was so nice, you were featured twice! lol

Lenn, I love that you are a straight shooter! I have been in salse a long time and believe that you can sell in any market if you don't let yourself get brought down by negativaty. This time is a little different and the climate has changed...for everyone.

We can not bury our head in the sand and pretend like everything is what it was two years ago. I am tiered of hearing people complaign about it! Do something about it!

Lenn, thank you for the honest post. I'm tired of having brokers tell us the market is still good. The numbes don't lie. I post the latest numbers on our listing presentation so as to give people the facts before they get their hopes up. We now have 3 or 4 potential sellers for after January. I know that they're hoping the market willl pick up, but at least they're forewarned about what to expect.

It's tough to swallow, but it's the truth.

have a great weekend.

Lenn, you are so right. I've switched my business this year to bank foreclosures and short sales. Working short sales is time consuming, but profitable when accepted. Thanks for giving us a clear picture of the future. More agents need to open their eyes.

Lenn - Great advice, data and information for agents to use in their business plans. We are offering a free trainining program beginning on Monday. Any ideas on exposure so more of AR takes advantage? Praxis Plus - A Process for Success

Lenn, We, local Realtors, are supposed to be the experts in the field of real estate. When we don't acknowledge the true conditions of the market, we look like amateurs. Nobody wants to do business with an amateur.

thanks for the long, informative blog post!!

Hi Lenn: Yesterday I talked with an agent in my office. He was leaning against the wall, staring off into space as I scurried by to meet with a client in the conference room. The agent said, "So, I hear you are selling a lot of short sales? Why would you do that?" And the office assistant nearby glanced up from his computer and said, "Oh, you mean like the house on Corino we put into MLS on Wednesday and is now in pending status?"

The lesson is if you want a paycheck in 2009, you will sell foreclosures and short sales. You should have been selling them in 2006, 2007 and 2008, too. By the time other agents figure this out, they will be flipping fries. Yes, you will work twice as hard for half the amount of money, but so is everybody else in this recession.

Hi Lenn:

How TRUE!!!

No sugar-coating it...but remain "positive" and press forward.

I love reading your blogs and even get excited to follow your game plan...it is very true as hard as it is get those short sales closed so they don't turn into foreclosures and then we can begin the recovery process...it will be more work than ever but it beats being unemployed

Lenn, We will see you here in 2010, we are not going anywhere! The market is what it is, no need too sugar coat. In one of your responses you used the term "upside down". You have obviously been around, that is a buzz term for other industries as well. Personally, any broker that does not come to grips with this market still believes in the tooth fairy...

It's not believable to paint a rosy picture in today's world. I agree it makes sense to look at the current market and adjust to it. It's something I've been working hard on doing for the past several months.

Lenn,

You were right on the money. for those Agents and Brokers who refused or do not know how to change with the market. They're already out of the business they just don't know it yet. I have 5 plan for my 2009 strategiesy, I am going to add #3, 4, 6, and 7 of your HOW TO above to my list. Thanks for your positive outlook to the future, and many thanks for letting me throw in my 2 cents.

Lenn it has been this way for a while now. This is why I just don't understand why many Realtors get so uptight when the media reports the facts. Painting a better picture of the market to a seller is a mistake. We should deliver facts and advise based on those facts. There are many that in an attempt to show that they are positive, paint too rosy a picture and it ends up coming back to bite them in the $#@!

Hi Lenn,

Great post. Although, I am beginning to use the word housing depression rather than recession due to the decline in price and sales volume. We have never seen anything like this. I also agree with you that this market is going to continue to have a strong head wind through 2012 when there are still millions of projected ARM resets as well as mounting job losses.

Now, all of that being said, you can still make money in this market because people are indeed still buying and selling (approximately 5 million existing home sales in 2008).

I think that open and honest communication with your clients needs to be a pre-requisite before any buying and selling decisions. These are uncertain times and we need to make our clients aware of the market.

Bill. I agree. This is my gripe with brokers who are furiously recruiting now promising wonderful things to their agents next year and the rosy pictures from NAR.

Jay. Indeed. A loan officer who doesn't bring added value for our business just can't compete with loan officers who are out there finding money for our buyers.

Christine. Good for you. You'll be way ahead of the folks that one day wake up and . . . .

Frank and Jodi. Upside down was a term I learned in the 1980s when we went through the Savings & Loan debacle. In fact, I think I'll revive my "Flapping in the Wind" post.

Tim. Thanks. I don't mind writing about the cold hard facts, but I also want to present alternatives to just sitting by and letting it happen to us.

Lenn,

Excellent and I love #3. Especially if a real estate agent is promoting themself as a first time home buyer specialist you need to know the loan programs available for first time home buyers. Many don't and I only know because I have asked the question to many advertising first time home buyer....and the answer often, but not always, has been vague or unsure.

Lenn, I have a curiousity question regarding

Do you give referals to lender but not accept them? I know you have strong views on this and just was curious how you handle this.

Toula. Agreed. Forward is my focus.

Elizabeth. Right you are. I think I'll revive some of my old posts about short sales and foreclosures and let folks know that my folks have been selling since they became a good buy. Looking for good buys for our buyers is my job, good buys and good financing.

Kristin. Thanks. Glad I shortened it.

Richard. Absolutely. This market is a lot harder on sellers than on buyers. Glad I'm a buyer's broker.

Fred. I can't tell folks how, I can only let folks know what. Each market is different.

Kaye. Thanks. Short sales and foreclosures are in the price range for first time buyers and relocating buyers. We're doing business and I know many others in our market are too. That said, the trend is not exciting. I need to do a market trend report. That's on my list.

Linda. Be glad you're in NC where real estate is still viable.

Cristal. Don't focus on what isn't selling. Figure out what is selling and find buyers for them.

Lenn - Great post. I think it is important to tell consumer the FACTS and what IS SELLING, and not be afraid to let them know the sales numbers. I think express rosy news to consumers are going to skew their expectation in property value or the ability to sell their property for them. Ultimately it depends on each person's motivation in terms of why they are in the market right now.

Richard. Thanks. How does one get featured twice. I need to figure that out.

Mark. My pleasure. If we know what we're dealing with, we can adjust.

Lauren. There aren't many folks even trying to buy what they can't afford these days.

Cynthia. Folks need to deal with the facts. We're going to lose a lot of agents and brokers in this recession. Best folks deal with reality early on.

Missy. Good luck. I just referred a short sale owner to an agent in my network yesterday. It too is a Wells Fargo. Let us know if yours goes.

Pat. I am not optomistic about 2009. If the government had focused on fixing the housing industry, we could already be out of this mess. However, they had the Wall Street guys to take care of first. So, it will take the market to cure this mess and that takes time.

Laurie M. I actually have a very positive attutide, for the folks with whom I work because we have adjusted our focus and are selling real estate.

The only way to deal with a recession is to down size, focus on what is working and use all of our experience to understand the dynamics and look for opportunities.

Lenn great honest information. Unlike many who claim that this is a great market. Yes, some things are still moving and people will always buy houses. However, sellers are hurting if they have not owned a home long, and in many markets, even if they have. I do hope that part of 2009 and most definitely 2010 will be better for everyone.

Lenn,
I wish CNN would report EXACTLY what you wrote here to everyone in the US.

Aloha Lenn-Thanks for the post. It takes a bit of an effort to balance a positive attitude with current economic realities, but adapting to the market in the ways that you outline are bound to produce opportunities. I also appreciate your calls for realism in working with sellers. I have encountered a few instances of late where market data is twisted into a sunshine and buttercups view of the market. It is pretty transparent and it gives the industry a black eye by undermining our credibility.

This is really a great blog. You did a great job of putting into words what we all should know by now. I'm really disgusted by REALTORS who flat out lie about the market in order to "save face" and get (overpriced) listings. The good thing that WILL come from this new market is that only those of us who work hard and smart will be around when the market improves. I have a job. I am a REALTOR. I work 40 - 60 hours a week and I tell the truth. I will survive and thrive and sounds like you will too. Thanks for some good words.

Lenn, this is an excellent, realistic (if depressing) analysis. Those of us who survive are going to have to become proficient in foreclosure and short sales, since that is becoming such a large share of the market.

We are going to have to spend more time and emphasis on buyers who aren't encumbered with difficult to sell properties. For these buyers, today's market is an historic opportunity. Look at the equity built up by a previous generation who bought in the 1950s after the Great Depression and a war. In every problem situation there is an opportunity for someone.

What a depressing post, and dead on too!
Household budget is adjusted, we are transitioning from "regular" listings to foreclosures and short sales, we are working hard to educated buyers and other agents about the nature of these type of sales (still learning a ton as we go).

Thanks for this post, I emailed it to my husband as well to read.

Brian. Indeed. Folks who buy the short sales and foreclosures today will be the first to benefit in the future.

Marian. Agents who take those overpriced listings are choking on them. I wonder if they did an honest analysis for the owners?

Pete. Thanks. Adapting to the market is the message here.

Eric. We hope the recession in real estate will not last too long. However, as you say, for folks who purchased in the past 5 years, it's going to be tough.

Sharpee. So do I.

HI LENN!

Yep, that's some hard core real estate talk, but facts nonetheless. I am trying to figure out how to make this thing work. I have figured out that it is hard work. I started in 1/07 & it hasn't been the ride that I thought it would be, but I'm still on the bus!

You got the facts nailed down. We do need to tell it like it is, adjust business plans, and remain optimistic.

I just watched a funny interview panel where Brian Buffini pointed out that agents got exactly what they were praying for a couple years ago: More Inventory.

So now we have this market.

“God, grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.” -Reinhold Neibuhr

The old saying goes Don't look a gift horse in the mouth. Get it moving!

“Three Rules of Work: Out of clutter find simplicity; From discord find harmony; In the middle of difficulty lies opportunity.” -Albert Einstein

Change allows new opportunities. The old opportunities of the last market were already explored and exploited. It would be very boring to have no New oportunities.

The fog lifted, the clouds parted and there was Lenn with a much needed real estate reality check. I'm working on a simple business plan for 2009--make changes and work hard.

The current real estate market is definitely a challenge. It's a brave new world of real estate and each of us has to find out how to succeed in our own marketplace and quick. It's not for the timid. Those of us who survived the most recent early 1990 's real estate market malaise have an idea of what's ahead and what's needed, however this market will definitely be more challenging!

Lenn I love you for telling it like it is. Many agents feel the media is to blame, I don't. If anything they are not reporting most of the bad news. We lived in excess for a while, and now we have to pay the price. I also agree wiht you strongly on the credibility issue we raise when it is really the brokers that cannot handle the truth. If they broker cannot handle it, then in all honesty... they cannot assist their clients.

100%! Once you face the facts you can use it to your advantage..instead of crying about the doom and gloom FOCUS on what can be done..then dig in and get those hands dirty people..its time to WORK!

Bravo! I love this straightforward post about what is going on in our industry. We basicly just need to change the way we have been accustomed to working and approach it in a way that works best for the way the economy is today. I love all your "pointers". I hope to still be here with you in 2010!

Debbie

Thanks Debbie. Folks get straightforward from me whether they want it or not. Stick around. 2010 will be here before you know it and you'll be ready.

Tara. Indeed. We who face the market head on will benefit.

Jim. It's not surprising. The main function of most brokers is recruiting. If they told the truth about the market, whom could they recruit??

Charles. This is a LOT worse than the 1990s. A lot worse.

Norma. That works for me too.

Sarah. "In the middle of difficulty lies opportunity." THAT IS WORKING FOR ME.

Gary. Thanks. Just keep up the good work and keep thinking. Change as the market dos.

Yvette. You started at a very inopportune time. Hand in and learn as you go.

Thanks for posting the link to the study Lenn. I've just browsed through it and will research it a bit further later. I certainly wasn't surprised by what I found in the survey,

No matter how bad the market may be, there will still be many more transactions occuring than I can possibly handle. Short sales, Bank owned and new construction (good deals there) seem to be the hot tickets with my buyers right now and the best values.

Will we work twice as hard for half the money? If that's what it takes then absolutely!

Brett. My market exactly. I personally have sold nothing but new construction this year. New home builders recognized the market and lowared prices dramatically two years ago.

However, I market for buyers for foreclosures and short sales too. They are a good buy her. Our agents are very skilled with short sales and foreclosures.

Lenn... again, hardcore at it's best... I have made 1 prediction and 1 statement that I can actually share as proof of what I stated... I said back in 2006 that we were in a slight recession back then. I even said in 2007, that it might be until 2010 and then uped that to 201, that it would take that long for us to recovery. If we aren't careful about this, Inflatin vs deflation, then we are in deep shit... If we make a wrong turn, we will hit a great depression. That might scare many, but that is hardcore. I even said that in a conversation with another loan officer yesterday.

Overall, we need to speak the facts, the truth, but in a manner that it doesn't seem all doom and gloom.Just as you stated, we need to find grants (creative financing), educate buyers on foreclosures and short sales... and educate, educate, educate.... it's bad out there, but we as professionals, can make it happen out there.

Here is a good example, as Brett said above... that we need to work twice as hard. Well, I have always worked that way, even when business was plentiful. But I spoke to a potential homebuyer in MI today... I spoke to her on the phone for 45 minutes. 30 minutes just on her credit alone. After we were done and I gave her a plan, about 2 to 3 months from now that she could buy, she told me that she spoke to 2 other loan officers about 2 weeks ago. But only spent minutes with her and told her that she needs to get her credit scores up. Sad... and she has good employment now... money saved now... but a lot of it was because she got divorced and was struggling because of her ex... not making payments at first and she had her daughter... an extra cost without her ex's support. My whole point... this took time on my part and won't produce a pay check for me now, but it will happen... and she is patient and thankful for my help.

Jeff Belonger

The numbers are in the millions, the potential is hugh. I gave up a good paying job to become a full timer. I hear every day from the seasoned pros about how bad it is out in the street (wrong). I think that there is enough to go around for everybody. Work a little harder, be true when asked about our industry, and think outside of that box.

Those of us that have been in business long enough to remember the early 80s are familiar with poor markets.

We survived those times by learning new skills and honing our existing ones. I believe the same thing will work now.

Lenn, you are right on target. I agree we need to be smart, and know our market and work hard to survive and thrive this housing recession. I just hope I can.

I agree with you. This has been a hard year and I have had to work harder, make changes to adapt to the market.

Jeff. Thanks for your thoughtful comments. My primary focus is, of course, home buyers. That's my business. However, without thoughful hard working loan officers, my job would be a lot harder.

I am spending more time talking to folks too and analyzing their needs before sending them to an agent. Often I can help the buyers, especially first time home buyers become more confident.

I don't pull punches about the market, but, as I tell them, the market is making some wonderful opportunities for buyers.

Mike Long. I don't believe that there is enough to go around. There are still far too many agents, IMO. I work hard to make contact with as many as possible. It pays.

Jim. Indeed. The advantage for those of us with time in the business is that we recognized the seriousness of what was coming and prepared.

Rebecca. Don't give up. Folks are still buying homes.

Anthony. Indeed. It's been hard on many of us.

Good Advice - It isn't pretty out there - sales volume is down but our submarket has an increase in median sales price. Everyone has to do what they need to do to get by in this market. For some, it is changing their business model. For others, it is hitting the pavement harder than ever before. There are fewer deals out there. But we are also seeing fewer agents in our market.

Hi Lenn,

The market is what it is. I, and other Realtors, choose to make Lemonade out of Lemons!

I wrote an offer today and went under contract on new construction. No foreclosure, No short sale, just a great price, great interest rate and terms. I'm happy for my clients.

Realestate 101 Adjust, Adjust, Adjust. There is a great book called "Who Moved the Cheese?" that is very helpful in attitude adjustments.

marcy Moyer Keller williams Realty Palo Alto, Ca.

Hello Lenn, what you say is very true. To remain and maintain a solid business through this down time, we as agents must remain flexible. I am finding myself listing foreclosures for the first time in my career but they are also selling quickly.

We must be flexible enough to deviate from our standard and think and "work outside the box." This is an excellent article and our economy just is what it is.

You're always a good read...happy holidays! Later in the rain~Deb

Hi Lenn! Now this is SOUND advice for all who wish to stay afloat, not only for the next 2-3 years but, for a lifetime in business. We MUST roll with the punches and if changing our business plan is what it takes, then so be it. It HAS to be done each and every year about this time when we're re-evaluating our buiness plan. Why not think outside the box and be a step ahead of the game when you get a sense that times are changing?

You're also right that we do have to work harder to keep the gross numbers up but, isn't that what re-modeling is all about?! There will be times that we hit the jackpot and have an easy year by selling only luxury homes--sell 12 of those a year and we've worked far less than in the years (THIS one) that we're selling starter homes and having to sell 120 of them! If you DON'T change your business model to accomodate the economical and industry changes, you'll be left in the dust!

Congrats on that little gold star too!

Debe in Charlotte

Lenn,

The mortgage sector of course is having its own serious problems. There are lenders, though, that do offer a little better pricing, for instance, than most, or their service, turn times etc., is better, so it pays to form a reliable relationship with a competent loan officer.

DEC

Esko. You are right. I cultivate and treasure good loan officers who will bring value to our relationship.

Debe. If I had a nickel for each time I've had to revise my marketing plan.. . . . . .

Deb. Right you are. We can't control the market, but we can control how we work within it.

Marcy. Adjust is the key word these days.

Tracy. Indeed, the market is . . . . . I am writing on a new home today. New homes have been my sole focus for my personal sales for two years now.

Ryan. Good. We need to see fewer agents in all markets. Agents and brokers must spend so much time, energy and resources competing with each other, it diminishes our net considerably. I have nothing against competition. However, our market is simply flooded with agents, not experienced or performing agent, just agents. The sheer numbers is astounding.

IMO, the NAR made a stragegic mistake in striving for number of members rather than skill level of members. The NAR could have used it's considerable resources to lobby for higher entry standards in the states. But, I lost that argument a long time ago.

It's good to see many agents that have moved past the denial stage.

I really don't look at the big macro picture when it comes to my business. Even in a depression, there's stuff happening. There are people with cash. There are people who bought their home 20 years ago. I try to look at the micro angle and just sieze the opportunities as they present themselves.

Tim. That's the advantage that agents who hae been around for a while have. We have a roster of old clients and can relate the present circumstances to similar markets in our past.

Lenn, I absoluteley agree with you. I doesn't do anybody any good to paint a picture that isn't accurate. As you say, simply look at the facts and the real estate picture is very clear to me too. This is why a year ago I decided to turn my attention to Short Sales. It is a tough time no doubt and life will always throw us changes as life and circumstances aren't constant. Right now Agents must work hard or hang up there hat.

Lynn. We sell short sales routinely. To us they are just inventory. We understand how it works and prepare our buyers. Agents who don't sell short sales are losing some good buys for their buyer/clents.

I had an opportunity very recently to publicly explain my local market conditions. Inventory is up, prices are down (and I think they will continue to slide), short sales and foreclosures will continue to hit market. Told it like I saw it. However, there are opportunities and it's our job as professionals to seize the opportunity for our clients.

Like I have mentioned somewhere before, you can still make it in this market if you adjust and work hard. I think I am somewhat lucky because I just started and don't have to adjust. This is the time when true real estate professionals are working, and others are leaving. Before anybody could do it.

Craig. Right you are. Knowing opportunities when we can find them for our buyers brings value.

Olena. Agent who enter this business and can survive this will thrive in a couple of years.

Recessions have never and will never affect the entire country the same as there are so many submarkets in the US. Austin was in its recession while the country was thriving in 2002 to 2004. I think you are going to be a bit shocked that we will not suffer as bad as you think in Austin, as we hit bottom and had yet to recover before this hit. I had 4 offer this weekend on 4 homes. That is not to brag....that is to say that the world is not coming to an end in Austin....and this is December. Check back on this comment in 6 months........

DEC

Tim. Good for you. However, I suspect that you have not been sitting in the corner contemplating your navel, but have been working hard.

Me too. We've been selling homes on a regular, albeit slower than usual, basis. As you say, it is December.

Our market is very slow as is confirmed by the hard sales stats. Numbers don't lie.

If He leads you to it, He can lead you through - we just all have to know how to use the shovel.

Wow Lenn...you are one smart lady...did you want to move to the Lewis Clark Valley and work with me? I have definatley subscribed to your Blogs...you will be GREAT to learn from.

Patty of Rock-n-Roll Realty

Lenn...indeed good advise. I'm trying to target first time buyers and get them in when prices are down are interest rates are down. But, then they hear these stories about 4.5% Interest, and BAM, back on the fence they go.

I've got to get a handle on what's going on and get my ship sailing in the right direction!

Lenn.. great post and no the numbers don't lie. But on a positive note, to survive and thrive in this market people are going to have to develop a better sense of marketing. And hopefully this developed sense of marketing carries over to the better days to come, making us all a little better than we were before.

DEC

Lenn - I'm a little frightened to write this, being some good news about our local market and all. But I am a bit of a statistics geek - so here goes. Colorado went into the dumps before the rest of the country. We struggled with the highest foreclosure rates in the country and we've been doing short sales for about 6 years around here. I do a lot of research for both sellers and buyers, especially investors. And I'm seeing over and over, when I look at some parts of our area, things are in fact already turning around. I work mostly the northern part of the Denver area and suburbs, and we are seeing fewer days on market, less inventory, a lower absorption rate, more homes sold, and in many cases buyers are having a hard time buying because of bidding wars. (The ones who 'don't want to play that game' lose out over and over again.)

I do a three year sales history by neighborhood for my clients, and I've seen many neighborhoods where prices are rising. We are still suffering from lots of foreclosures and that will keep the prices down. But the question is for how long? I don't make promises, but people who've been playing around with the idea of buying or selling are seeing the trend - prices are sluggishly moving upward. I wonder how much difference it would make, if they didn't hear anything but gloom and doom about the national market and paid attention to the local facts.

I just listed a house for the second time. Last year, it would have to be priced at $100,000 to sell, but she didn't want to come down that low and took it off the market. Last Thursday we listed it for $120,000 and it was under contract on Sunday. What if I had told her, the turnaround is years away, you must drop your price? That would have been very bad advice!

This blog does not allow anonymous comments