Bad real estate market? I ask the question...For whom?

By
Real Estate Agent with Weichert Realtors Hallmark Properties

 

We are in the midst of a very unusual (to say the least) real estate market. Everyone always asks us, "When it is going to get better?" My knee jerk response would be, "We all know that no one can predict the future. However, economic indicators say that this could possibly continue for another 6 months with a leveling off period for about a year and then we will see moderate increases at about 3%..Blah blah blah blah blah" 

But as we delve deeper into that question you have to ask yourself this; "Get better for whom"? In 2004 we saw a buying frenzy for real estate unlike any other time we can remember. Buyers were at the mercy of sellers who were driving up prices on an hourly basis. Full price offers were being rejected by sellers and offers above asking price were being submitted. Would you consider this to be a "good" real estate market? Once again I would ask, "Good for whom"? Most certainly it was not good for the buyers. Many of those buyers paid exorbitant prices for a home that, if given a choice, they wouldn't have bought in the first place. They felt pressured into buying because of their fear of being "priced out of the market", or losing the only home available in the neighborhood they wanted.

Economics 101 teaches us about the law of supply and demand. As supply increases, demand decreases and conversely, as supply decreases demand increases. Each of these scenarios is good for one party in the transaction.

The other day I imagined myself walking into the grocery store and, to my astonishment, seeing only one type and brand of white bread on the shelf. Adding to my astonishment I realized that this bread was now double the price!  Even though it was not the brand of whole wheat I always buy, and I need it to feed my family, I find myself paying more for something that was not what I originally went into the store for in the first place.  For the baker this is great. He only has to provide one product brand and can charge more for that product. For the consumer this is horrendous.

In this age of 24/7 news and a media that seems to only see the glass as half empty, our view of the world is often distorted in a way that can actually drive people into their own personal depressions. In fact do you really think it's a coincidence that we see so many ads for depression treatment drugs during our nightly news stories? They constantly report on foreclosures and prices being driven down by the large inventory of homes that are not selling; all of which have had a negative impact on the economy as a whole. The one thing they avoid telling us is that this real estate market is probably the best we have seen in a very long time... for buyers! Prices have come down significantly in the past year. Sellers are extremely negotiable and you have a plethora of homes to choose from. Builders have huge inventories of new homes and are giving away upgrade packages just to get their homes sold.

So, the next time your favorite news anchor is telling you another depressing story about the housing slump, foreclosures, the banking crisis etc. think multi grain, whole wheat, honey sweeetened bread for .75 cents a loaf! What a deal!

For questions regarding properties in the Central Florida vicinity call Suzie or George Crudo at 407-489-8953, or visit http://www.GeorgeAndSuzie.com

 

Comments (3)

Herb Hamilton
RE/MAX Preferred Inc. Realtors - Portland, OR
Real Estate Broker ,CDPE, Downtown Portland

I will go one better than that. Your first sentance " We are in the midst of a very unusual (to say the least) real estate market. " What is unusual about this market?

It is only part and parcel to a very NORMAL REAL ESTATE CYLCLE. Not unusual. Not abnormal. Just Normal.

May 05, 2008 02:26 AM
Hope Goss
Ventura Property Shoppe - Ventura, CA
Ventura Real Estate
I like your bread analogy!
May 05, 2008 02:28 AM
Anonymous
George Crudo

Herb

It's unusual in the respect that I can't ever remember such a large number of foreclosures in recent memory. Our market here in Florida is among one of the worst hit areas in the country. As a result sellers who are not in foreclosure or pre-foreclosure are now competing against these distressed properties. This has created unprecedented price reductions. The likes that we have never seen here in our region.

 

May 05, 2008 03:47 AM
#3