Another intemperate thought... real estate related...

By
Real Estate Agent with Century 21 Results Realty GA RE Lic # 282060

I don't recall where I saw it, but I ran across a comment by a real estate agent about how prices are getting out of line... they are just crazy low.  It was something to the effect of "I can't wait until these crazy prices go away and we get back to normal." 

It kept picking at me

I couldn't leave it alone.  That thought kept coming back into my mind.  I could hear it.  That thought was popping up on my computer screen while working on other stuff.  I can't wait until these crazy prices go away and we get back to normal.  I couldn't figure out why this was bugging me so much... it was bothering me that I couldn't let it go... 

And then it came to me

The reason that I couldn't shake it was because it needed to be addressed.  It was crying out for an answer. 

I don't know everything...

Ask my wife.  She'll be happy to tell you.  But, I AM logical.  I can see connections in many things.  And I see the connection here.  Let's start with the market cycles...

Market Cycle psycologyTake a look at this chart. 

Right now we are between denial and depression... depending on the person and the specific market. 

I think that the person with the sentiment above was in the denial stage. 

Many sellers are in the "Capitulation" stage.  They have given in to the "new market reality." 

and that is...

The new market reality is this.  This IS the market.  While the deals won't be here forever, they ARE the right prices for this market. 

 

So, this leads me to a final thought... actually a pair of thoughts...

For sellers...

History is history.  We aren't going to see 2007 prices for a while.  What your house WAS worth is just that.  I know it isn't fun.  And chances are pretty good that your agent has suffered EXACTLY the same thoughts.  I know that I have seen the price erode on my own home.  My wife and I bought it in 2001, and the current value may well drop below that price.  We have had to kick out the ideas of selling it for 20% more than we paid...  Right now, even with me in the industry, we would lose money selling it after fees...

For buyers...

Take a close look at that chart.  Note that between despondency and depression lives the deal of a lifetime.  In some markets we are there.  In other markets, hope is emerging.  In yet others, fear or panic still rein.  But the difference between buying in a period of desperation and a period of optimism is the selection.  There are LOTS of people buying in the market when there is optimism. 

The market rises and the market falls.  Property will seldom be worth $0, nor will it be worth an infinite amount of money.  It obviously has to trade between those figures.  And calling the bottom of the market is something that is very difficult to do until WAY after it has passed.

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Topic:
Real Estate Market Trends
Location:
Georgia Gwinnett County Lilburn
Groups:
Posts to Localism
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Market Reports
Celebrating Free Enterprise
Tags:
investment
seller
buyer
honesty
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foreclosure
business of real estate

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Steve Hoffacker
Steve Hoffacker LLC - West Palm Beach, FL
Certified Aging In Place Specialist-Instructor

Lane,

Great post. Excellent. We've still got a ways to go in some markets before prices get low enough to sustain the business, but that's what a market correction is all about. We all knew it was coming (that is those of us who were paying attention). :)

Steve

Feb 14, 2009 02:54 PM #1
Rainmaker
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Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re

I have been a believer in the market and letting it determine the value. My concern now is the government is so involved that we may never be market driven again we will have to rely on Washington.

Feb 14, 2009 03:13 PM #2
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Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Steve - Different markets are at different stages and moving at different speeds... 

Terry - Whenever the government starts trying to control the market there is a backlash later...

Feb 15, 2009 04:19 AM #3
Rainer
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Marlene Scheffer
Realty Station - Bremerton, WA
Realtor to Kitsap County, WA

It all comes in stages.  Real estate has always flowed and fluctuated, is always cyclical.  Some agents just don't realize that....

Feb 16, 2009 01:32 PM #4
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Steve Hoffacker
Steve Hoffacker LLC - West Palm Beach, FL
Certified Aging In Place Specialist-Instructor

Lane,

I appreciate your posts to "Celebrating Free Enterprise" and am moving this one to a feature. Thanks and great job. :)

Steve

Feb 19, 2009 11:46 AM #5
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Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Marlene - Every type of market... 

Steve - Thank you.

Feb 20, 2009 03:28 PM #6
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