Those that know me know I am a fan of staying current, in the know, up to speed, (add your own positive buzz words that mean doing the best I can). I love this phase of my life.
My mother was right, it is all just a phase and I will out grow it soon (wait this is not a therapy issue!) The reality is the real estate market is different things to different people. For qualified buyers it is an awesome time to purchase. To a homeowner who has been laid off from work, not such a good time.
On of my favorite peers on Active Rain asked the question (and I paraphrase) "What are you (CHERYL WILLIS) going to do for your clients (Sellers &/or Buyers in SW MO) during this time of utter doom and gloom (the survey did say the housing industry is in a recession). Now that I know LENN is speaking directly to me, let me respond and then share her original article that got me to thinking. (don't you just love getting to read some of the things my peers write!)
MY RESPONSE: The glass is 1/2 empty or the glass is 1/2 full. Either way be thankful you have a glass. If we as agents are going through a time of 1/4 full glasses we can still provided a service for our clients. That after all is what our business is. WE are suppose to KNOW WHAT TO DO in season and out.
I love Lenn's hard core talk she can put into words what most can't. The simple truth is we all need to do what we can- reality is going to be a bit differnt for awhile but is still just going to be a phase and we will get over it. I plan to still have my glass when we do. I plan for my clients to have theirs too.
ENJOY LENN'S POST:
* * * * 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.
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.