If a baseball player or champion bicyclist takes steroids or some type of performance-enhancing drugs, he/she may accomplish great things and go to heights never imagined. A batter could break the unbreakable record set by Hank Aaron decades ago. A bicyclist could win tour after tour and make the Tour de France a household word. If the performance enhancers are taken away, over time their performance might not be as astounding and records would stand. Or if a record was broken, some bystanders might ask, "Well if there were performance enhancers involved, did he REALLY break the record? Does it count?"
I kind of think that's what we're looking at in real estate.
So ‘the real estate market' has gone through an amazing period of time where people can actually buy houses with no money, just their good looks, and then sell the house a year later and make $100k. Everyone has a different take on why ‘the market' is doing what it's doing. I do believe a lot of it has to do with taking away performance enhancers. Performance enhancers such as ‘no document' loans, no money down, stated income, interest only, are for a select few who can really afford those types of things but they became common place and too easy to get. I hope real estate remembered to send a big thank you to the financing industry for the boost. Take those away and things become REAL, real quick.
Maybe that's why it's called REAL estate. It's for real and you can only toy with the numbers in so many ways before it pushes back. "Under all is the land."
Sure, I'm new to this business but I am no spring chicken. If you made hundreds of thousands of dollars in the past few years , I hope you saved some of that money and I hope a lot of those buyers are referring their friends and associates to you now. It's back to basics now.
I was in the advertising business in the late 70s ( I told you I was no spring chicken!) I worked for a metro newspaper and at that time 80% of the households subscribed to a newspaper and depended on it for most of their regional and local news. Walter Cronkite and Chet Huntley and David Brinkley kept us informed of national and world affairs. Life was good. Phones rang off the hook.
Business was so good, our salespeople could practically golf all day or shop all day, come back to the office and return messages which simply ad space reservations. Advertising was practically begging to be in the newspaper. Life was good.
Then the early 80s came with high interest rates, huge ground inventories and layoffs. Life, all of a sudden, was not so good for some. Revenues fell. Major advertisers cut back and changed strategies.
The performance enhancers for the newspaper industry were taken away. All the things that made it fun were gone for the moment it seemed.
Over night it seemed the business changed. That's when I learned sales. In a changed environment. The rules were being rewritten. When the going gets tough, customers are even more important. Within two years, the region where I lived and worked lost 25,000 steel industry jobs. Ouch! I was really good at 'going out of business' ads. It was a skill I was anxious to be rid of and with a few years, I had to develop new skills to get new business and write good ad copy for a growing market.
I was blessed by that time. I learned good basics. A lot of people left the ad business because they had become let themselves become dinosaurs in a few years. They did not adapt.
So now I begin another business in a time of change. I hope I can enjoy the same kind of success in real estate that I enjoyed in advertising. Life is good. It might be different but it is good.
When I see that housing prices are up and up, I wonder what makes that so. Is it because only people who can really afford to buy a home are buying and able to qualify for conventional financing?
The performance enhancers are gone.
Being in marketing most of my adult life, I'm always interested in what the numbers really mean.
But the most important meaning is what it means to your customers in their local neighborhood in the local market. Make yourself even more valuable as the interpreter of change for clients and prospects.
We might be in for some more adjustments in the market. We can adjust and adapt. It just won't be the same but life is good.
Copyright 2007 Tall Cedar Publishing
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