Media Mayhem in the Real Estate Market
"The real estate market is dead!" " We're in a depression! This is horrible!" " You may as well hang up your open house signs and pop your balloons because recovery is futile!" "Things have never been this bad!"
Every time I turn on CNN, CBS or ABC News (Yes FOX, you are guilty too), you hear this mantra being repeated. Not only is the real estate market writhing in its death throes, it is pulling the rest of the economy down with it. The sky is falling, okay? Now take your Prozac and get over it. Since the rest of the world depends on your real estate market, I guess you've got some work to do.
Sane real estate professionals pour through their monthly and year to date statistics on their local market and see falling numbers:
Harford County, Maryland has dropped 9.82% in their average sold price compared to April of last year. Median sold price dropped 7.05%. Total Units sold dropped 30.10% from April of last year. However, average days on the market decreased from 125 from last year, to 121 this year. That is a 3.20% improvement.
Baltimore County saw less of a decrease percentage on home prices between April 2008 and 2009, however the average D.O.M. increased by about 4%. That is something to think about if you are considering purchasing a home in Baltimore County. It may be easier for you to find better deals than if you purchase in Harford.
This tells me that average prices of homes are still coming down (good thing for buyers). Units sold, while 30% less than last year, could also mean that fewer homes are going up for sale. You wouldn't know it to look at my neighborhood, but I look at this as a market correction. This is what you should be explaining to your home owners who are on the fence about lowering the price of their homes.
The best indication that will tell you if your market is improving is that average D.O.M. (days on market). If it is decreasing, that is a good thing. This is the number I would keep an eye on.
Keep in mind that the freak of nature we saw in the early 2000's, with prices of homes increasing in value 10% or more every year was just that . . . a freak of nature. It was not the norm. Home owners and investors expecting to take from the market are not going to have to give back a little.
This isn't dooms-day. This isn't the sky falling and CNN analysts don't know everything. Fear-mongering abounds on the evening news. These people should be writing fiction and giving Stephen King a run for his money. The facts are in the numbers, not the beet-red face of Lou Dobbs sputtering beat-box economic fire and brimstone like Baptist Minister (get your umbrellas).
The facts are what goes up must come down. The faster and higher prices rise, is how fast and hard they will crash. This is not the worst economy we've ever had. This is not the worst recession we've ever had. You can wallow in self-pity or you can keep on going like we are headed for a "normal" market, which we are.
The correction has been swift. Painful, but swift. Take advantage of the new tools this correction has given you. You have little window of opportunity to have first-time buyers take advantage of the $8,000 tax rebate, the 4.75-4.85% interest rates and home prices down around 2004 levels. There IS no better market to buy!
So go out there and spread the good news. The sooner we take the initiative to correct our own market, the sooner the rest of the economy will recover. There are buyers out there! Who are YOU going to give them to?
Bonnie Cox
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