Being in real estate for over 24 years I have been through many ups and downs of the market and I have not seen it this down then I have in the past 6-9 months. Between sellers who believe that their home defies all market conditions by overpricing their home (with agents agreeing to place those homes on the market) to the credit debacle, with everyone from the federal govt. to banks to buyers, to sellers and to yes, some of us Realtors, to blame. But as in every market being cyclical, things would change
I have also realized that real estate is the engine for our economic condition. As real estate sells the rest of all sectors follow - ALL SECTORS. Real estate economics is consider a trickle-up model. Consider the following: Buyer purchases their first home which allows their seller to move-up to their next home and so on and so forth. With that said, all industries are greatly enhanced. The appraiser who are appraising, the Realtor, who is the agent for either or both parties, the home inspectors, the attorneys, the painter, plumbers, contractors, the furniture companies, the furniture manufacturers, the landscapers, the pavers, the government from tax collections and transfer fees, it goes on and on. Now with money back to all these professions, it is now spent on dinners out, entertainment, clothing and other retail, and so forth.
And so, as the real estate market goes so does the economy or as I call it "The Circle of Economics".
But with all the discouragement of the market there was a silver lining. The American Recovery and Reinvestment Act was the answer and our government the provider. However, the stimulus package we all have been waiting for missed the mark of a true stimulus. It did not fully address putting the money back into Main Street. You see up until yesterday, I was encouraged to the possibilty that ALL homebuyers (not just the first-timers) would be given a 10% credit (not to exceed $15,000) without repayment for anyone buying a home prior to the end of 2009 and a 4% mortgage rate. However, what was, is not any longer. It now has reverted back to first time homebuyers credit only of $8,000 without repayment but only if there is a purchase prior to the end of August 2009. No mention of reducing the mortgage rate or softening the stringent mortgage qualification guidelines.
Will these changes in the real estate side of the recovery help at all? It can, but now it must be relied upon by those first-time homebuyers who are financially able to get off that fence and buy ASAP. The window has a small opening, but there is an opening. It is $8,000. It can assist with closing costs, with lowering the downpayment, which assists in mortgage qualifying, buying furniture, needed repairs, etc. As I mentioned above and so many times before in my blogs to you - the economic recovery begins with the first-time homebuyer.
Who else can start the on it's way to recovery. It is the homeseller of that first-time buyer home. It starts having to have to sell your home instead of testing the market. And luckily for us, we are seeing a 30% in the number of homes for sale from one year ago. The next is pricing your home correctly. If you do not know the value of your home in todays market, talk to an expert, whether you hire a certified appraiser or a seasoned Realtor, like myself. Whoever it is, they must have a clear understanding of what is required today. If you list your home with a Realtor, DO NOT LIST IT WITH THE REALTOR THAT GIVES YOU THE HIGHEST PRICE but one that prices it with the best chance to get it sold. There is no such thing as underpricing in this market. A home a little underpriced will bring in a bidding war which will drive the price to it's tru market value. And remember that the sale of your home is a business transaction,and although the seller may set the asking price, it is the buyer that determines the sold price. The buyer looks at value compared to your competition. In other words, does your home have good shelf position. Making sure that your home is shown in its best light, which includes curb appeal and staging, is necessary. Next, think about giving incentives yourself to that buyer to make your home more attractive to a prospective buyer. And lastly, using a professional to assist you to get it sold and closed.
Although, the changes in the recovery are not exactly as I had hoped, it has to work. We are in this together and we shall work together to get us out of it. Are you ready to make it work? Then let's get started. www.Jeffrey.Halpern@PrudentialNewJersey.com