In 1998, when I turned my back on the certainty and comfort of a steady paycheck to become a "Full Time Realtor", the Central Jersey real estate market was just starting to heat up.It was helped, in part by the now famous (infamous) Community Reinvestment Act (CRA) of 1997, which, as mandated by President Clinton and the Congress, essentially penailzed banks if they denied loans to borrowers who probably couldn't pay them back..BUT..that's another Blog subject (stay tuned).
Anyway..as mortgage money became ever-more available, it seemed that ever-more buyers were jumping into the market. Naturally, the law of supply and demand dictated a favorable environment for sellers.
You know the rest: we had a red-hot run of home sales for the next six years.
A house would be "Under Contract" on February 1st at a sale price of $375,000...and be worth $389,000 when it closed on April 30th. This kind of appreciation and "Built-in Equity" created a new breed of consumer: The Home Flipper. If you worked it correctly, there was lots of cash to be made. And lots of people made lots of cash for the next several years. But, alas, like the Beauty Queen's good looks, the Ford 289-V8 and Rod Blagojevich's tenure as governor..all good things must come to an end.
And so it was with our Seller's Market.
Conditions were noticeably changing by the summer of 2004: Homes which had been selling on average in 24 days...were now languishing on the market for 2 months or more. Buyers weren't buying, Sellers were beginning to panic. Realtors on Floor Time were periodically picking up the non-ringing phone to verify that it was still working (in between games of solitaire on the desktop pc). It happened..the market had slowed down. Now, what do we do?
Simple: we keep selling houses. Actually WE (Realtors) ARE already doing it. For example:
Single Family Homes Closed in Middlesex County NJ Jan 1 through Dec 31 2007 : 4977
Single Family Homes Closed in Middlesex County NJ Jan 1 through Dec 31 2008 : 4030
...Yes. That's a nearly 20% reduction in home sales over one year..BUT...it demonstrates a very important fact: WE'RE STILL SELLING HOMES. Check the data in YOUR county..you may be astonished to find that people are still buying homes.
So...give yourself a pat on the back. Quickly. Then get back to work. Because, it seems to me that the only way the economy in general AND real estate in particular are going to make a dramatic comeback is if WE make a comeback (We, the Realtors, the Professionals..We The People). If you're waiting for "the Government" to rescue the housing industry--Don't. These days, there seems to be very few government employees who have even the slightest clue about rebuilding an economy. They blather on about "Stimulus Packages" and "Mortgage Guarantees" while home values continue to decrease and foreclosures increase. They bloviate about "Wall Street abuses" while businesses on Main Street are closing due to a lack of customers. Even the new NAR President has jumped on the "me too" bandwagon..proposing that the US Treasury use TARP funds to pay a buyer's points at closing. None of the so-called Bailouts have worked thus far..why would this?
What DOES work? We do.
We Realtors are, by our very nature what Teddy Roosevelt called "Rugged Individualists"..we don't punch a clock, we don't like to be told what to do (we don't even attend half of the office meetings.. unless they're announcing a sales contest..and there'd better be bagels.). We work as independent business people..we get up every moring and get to the office by 8:30am so that we can return emails and calls by 11:00..and be out knocking on doors by 11:30am--all without the certainty and comfort of a weekly paycheck. We spend $420 (of our own money) to mail 1000 postcards to our Farm..knowing that on average, less than 20 of them will generate a single response. But, we do it..because we also know that its important to establish ourself in our neighborhood..its important to keep your name (and your face) in front of your current and future clients. We do all of this not because someone hired us to do it. We do it because this is OUR buiness..our industry. We own it. We run it. We succeed or fail due to OUR efforts. Not our "Department Manager" or "The CEO" or "My Boss"..or some nitwit politician in Trenton or Washington, or Springfield, or Boston or Austin who never ran their own business, or assumed any risk of failure, or knocked on 32 doors in 98 degree heat because they knew that the 33rd door just might be thinking of selling. We don't do it for them. We do it for US..for me, for my family, for my own satisfaction.
Now is the time to put that independence and entrepreneurial spirit to work.
Get out there...talk to your clients..sellers, and buyers..explain to them why this IS a great time to BUY..low interest rates, a variety of homes to choose from. Explain to your sellers the importance of (are you paying attention?)--COMPETITIVE PRICING AND MARKET POSITIONING. Scrutinize and Evaluate each potential client and each potential transaction. Is it feasable? Can my clients buy this home? Do my clients actually WANT to sell their home?
We can't rely on others to bolster OUR industry. We must start at the grass roots of this business: the consumer. Focus on:
- Finding a client
- Identifying their (housing) need(s)
- Finding a solution to their needs
- Implementing the solution
- Finding another client
We all need to provide the most competent advice and the best professional guidance to our clients. We owe them nothing less. We owe ourselves nothing less.
So the next time a friend or a prospect asks you "When will the real estate market turn around"..tell him.."I've already started the process..take a look at this home I just listed..who do you know that would like to buy it?"
Happy Sales to you...until we read again..Happy Sales to you..keep smiling until then (with apologies to Roy)