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Changing Markets

By Tom Smith

Real Estate Agent with Fredericksburg Realty LLC

March 06, 2009 07:43 AM

In our real estate business, it seems like there are two real estate markets.

The first real estate market is the "distressed" market - foreclosed homes, REOs and homes being sold under a lender short sale.

The second real estate market is the listing - market. Home -sellers who are selling.

We have home buyers who are specifically looking for homes in the first real estate market. Basically, they are hoping for a bargain. But, buying such property at a lowerr price comes with risk (depending on where the property is located, such risk can include "as is" home condition, no guarantees, and minimal or no seller disclosures) and may require patience while waiting for decisions to be made by the seller.

We also have home buyers who want to stay away from the first real estate market, and concentrate on a more "normal" sale. These home buyers are more comfortable with the "normal" home buying process - the face-to-face home seller, including seller disclosures.

The market will not get back to normal until our inventory of the second gets low.

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Pat Tasker

Shorewest Realtors - Germantown, WI

Your Milwaukee Metro Area Agent (WI)

Yes, and those REO's come with 10 page disclosures that say AS IS,AS IS, AS IS, and if you don't sign it, you don't get the house! It is not a market for the faint of heart!

Mar 06, 2009 07:50 AM

Rob & Jeannie Steward - Realtors®

RE/MAX Advantage - Nashville, TN

We Work TWICE As Hard For You! - Ashton Group

I respectfully disagree. The second realty market is the norm. Although it would seem the ones cashing in big these days are the REO specialty agents. Once the foreclosure / short sale market levels out to a dull squeak, we will have a normalized market.

Mar 06, 2009 07:52 AM

Lola Audu

Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate - Grand Rapids, MI

Audu Real Estate~Grand Rapids, MI ~Welcome Home!

I like your comment about 'sellers who are selling.' This is entirely different than sellers who are pretending to sell and simply testing the market. Sellers who are focused, informed, motivated and willing to price competitively do have an advantage of not burdening potential home buyers with the many unknowns and complications which are often a part of the distressed home sale.

Mar 06, 2009 08:26 AM

Svetlana Stolyarova

Local-n-Global Realty, Cleveland and International Real Estate Solution - Mayfield Heights, OH

Local-n-Global Realty, Broker 216-548-4663

There are indeed two markets today. The difference is much deeper than just the pricing. Normal market means normal representation of buyers and sellers, normal civilized relationship between the parties. Sometimes it looks real scary to watch how ethics and professionalism is washing out of the first realty market. Is it normal? Is it beneficial for buyers? Not everything can be measured by price tag. Just IMHO.

Mar 06, 2009 08:50 AM

Tom Smith

Fredericksburg Realty LLC - Fredericksburg, VA

Your Top Real Estate Agent In Fredericksburg, VA

To make a correction, I meant that the market wouldn't get stable until our foreclosure inventory declines. That will probably not happen for at least a year. Countrywide will be releasing about 75k foreclosures into the market this year. The government has advised them to trickle their release. This will take some time. You were correct Rob and Jeannie. The second is the norm. I can't wait to see the "norm" come back. My last 5 transactions have been foreclosures. There are no feelings with these transactions. Just business. I have to give credit to the agents whom have the foreclosure inventory. They earned it. Some traveling across the nation to meet with asset managers at different firms. It is too late to pick up the listing side of these transactions now. The damage is done. I concentrate now on the buyers looking for a great deal. Foreclosure seminars have been very successful in capturing this clientele.
No one is immune to the effects of today's market. Just today, I went on a listing appointment and met a Marine and his wife. The Marine is getting stationed in another state and must move. This guy has toured Iraq at least three times. The home was spotless. The problem was the subdivision was flooded with foreclosures priced at least 100K below what this poor family owed. They can't compete with that. What happened to buying a cute little home and fixing it up and gaining equity when ready. It's gone for now. I communicate the facts. I had to tell that family what their neighboring bank owners were asking for their inventory. It broke their hearts. They may even have to consider a short sale just to compete. If you look at the whole picture, it's confusing. First, the lenders made a ton of money giving out loans to questionable customers with low credit. Then we bailed them out. Now they are flooding the market place with homes that are priced lower than my sellers could dream to sell their homes for. While representing the purchaser, I want to find the best deal(s) for my client(s) and the fact that you may purchase a million dollar estate for 500k is very entertaining. I'm a Lister and used to get most of my leads from advertising those listings. When the phone rang, I converted the prospect(s) to client(s). The phone now only seems to ring for the best deals. I currently have 50 listings in the "norm" market and my leads on those are very slim.
Are you seeing these same situations in your locations?

Mar 06, 2009 02:39 PM

Eunice Waller

Berkshire Hathaway HomeServices Simpson Realtors - Locust Grove, VA

Working Together, We Can Do Great Things

Hi Tom, We are truly in unknown territory. Consumer confidence is at an all time low. All you hear is "the sky is falling" from the news media so folks are not sure what to do. Right now is the best time for folks to take advantage of the low interest rates while home prices are at their lowest in years. We as realtors have to prepare our clients for this new "norm". Wishing you much success in '09.

Mar 06, 2009 08:25 PM

Changing Markets

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