So let me see if I understand correctly…
Foreclosures are down slightly but by some accounts the numbers of loans that will go into default in the coming years will still go up. New construction surges and new home sales are up substantially but the value of raw land in many places is down. The stock market is up 190 points. The stock market is down 227 points the next day.
We created more jobs last month but the unemployment rate went up. Greece is in the financial crapper, California is not far behind and yet Goldman Sachs’ profits could probably save both from insolvency.
Units of resale housing sky rocket across the country in April while many in the real estate industry know what’s coming in May. HUD secretary Donovan talks of ending the mortgage interest deduction on real estate as the home buyer tax credits end.
Apologies to Robert Lamm and the gang but does anybody really know what time it is? I admit I no longer do.
News is a spin cycle
You see ‘the news’ seemingly has now become a universally known spin cycle for the author and/or political action group and the housing industry seems to have lost it’s immunity.
If you put the top headlines for real estate across a page and asked most any consumer to tell us what the state of the market was, I’m not sure most would be able to do so. With all of the contrarian points of view out there who can blame them?
It’s even gotten to the point where if you watch the average weekend TV talk show, you can count the realities of the market by how many people are in little boxes on the screen at one time. Hey, look everyone… Fox News has got their own version of the Hollywood Squares on every Saturday! Each box has a different pundit taking a different view but at the end of the day nobody has three in a row. Peter, I’ll take Paul Lynde to block please. He what? Oh… never mind.
The point:
The point of this is that for several years we had this discussion of real estate as if it were a universal, living breathing beast that was behaving nearly the same all over the country. Well perhaps a little worse in Cali, AZ, Nevada and Florida but for the most part we spoke of it as one.
Now, as some light shines down the tunnel we’re getting back to realizing just how microeconomic it is. In 2008, if you asked a real estate professional for one word to describe their market you’d get a similar word from most. Occasionally some would even conjugate that word (always good for a chuckle).
Today if you asked two Realtors working a 12 miles apart how their market was you probably would get a different answer from each. Then there are the pundits. I may well have to stop listening to any of them for the next few months, peek in on them after the midterms and then start ignoring them again until after 2012.
The summary of all of this is that one of the great challenges in my business these days is trying to get my clients and customers past ‘the news’ and on the same page with reality. Given the divergent opinions out there, it’s just another thing that is making any real estate transaction a ‘long putt’ as my brother would say.
What I’m finding is that education for the consumer goes on with or without my input so I’m trying disparately to get in front of it. In the meantime, I’m looking to unplug every flat screen I can find in the homes of my clients… and hope they don’t spend too much time on Drudge or The Huffington Post getting ‘educated.’
Fred Romano
May 26, 2010 at 1:05 pm
Greg, you’d have to “up-plug” everything at your clients homes… TV, Internet, Phones… Hell why not just force them to stay inside the house and not speak to anyone! The news is everywhere of course and the RE market will likely be in the crapper for several more years. I don’t see any end in sight do you?
Benn Rosales
May 26, 2010 at 1:56 pm
Greg, ultimately, it’s the buyer/sellers decision. As you know, we can only advise, and if they chose to shop around for an alternative opinion, then so be it. I’m a bull, I’ll always be bullish, and at the end of the day, my clients are pretty much just as bullish as I am. So don’t bother being in front of anything, that’s just to much work. We can only provide solutions that fit within our opinions of the market, and if our consumer agrees, then we do real estate. Pretty simple.
Love this analysis.
Greg Cooper
May 26, 2010 at 2:57 pm
Fred…..as things recover it will be very specific, very local and very thin. There will not be hoardes of buyers for any one property like the old days. I have $200,000 homes getting activity 3 miles from $500,000 homes getting nary a sniff. What bugs me is that every seller is an expert by absorbing the media when they personally have sold exactly 0 homes in the last few years let alone months. That’s not the seller’s fault….just the way the media influences them and they absorb it.
Benn…thank you.
Ken Brand
May 26, 2010 at 10:20 pm
It’s not just housing. All the experts, stock market, retail, Tech, oil, etc., they all sorta look like weathermen. Inaccurate is the only accurate description.
Therefore, as you’ve shared, you have to rely on yourself and the true trusted.
Onward.
cheers
Real Estate Agent Classes
May 27, 2010 at 12:32 am
I am currently unemployed and looking to reinvent myself. I was thinking about becoming a real estate agent. I know based on your article it market health varies based on where you are located (NY Metro Area). Is this something I should consider, is the market healthy enough for me to spend my time trying to get certified?
Ruthmarie Hicks
May 27, 2010 at 3:52 am
OK..let’s take this from a more positive perspective – last year there was NO good news. We were shedding jobs faster than my Siberian Huskies shed their coats in the heat….and if you know anything about huskies – that’s a terrifying analogy. The stock market was in the tanker and the housing market in my area was virtually FROZEN. Against the backdrop of the worst recession since the Great Depression – what we have had is amazing PROGRESS. It’s an awful situation for very many and will continue to be until we do something about salaries and wages. That will require government intervention using both carrots and sticks – but the door has to swing wide open with better compensation for employees as well as business owners.
Greg Cooper
May 27, 2010 at 7:20 am
Ruthmarie,
You say to – may – to, I say to – mah – to.
My sole point is that a year ago it was universally bad news but today, most news is just political spin one way or another. I still wish news was just news and that I didn’t have to fix the problems of opinion that inhabit my client’s collective brains.
Ken Montville
May 27, 2010 at 8:48 am
It’s like the old joke, “If you ask ten economists a question, you’ll get eleven answers.”
Even at a micro, hyper-local level things can be different. There was a house down the block from a current listing of mine that had been on the market almost a year. The price had been “adjusted” a few times but still no sale. My sellers came in below that price (just by a little), put their home in great condition and it sold in four days.
Ditto for a single family house that will be going to settlement soon. In fact, this house has a major, frickin” highway being constructed within viewing/hearing distance of the back deck. Lesson: aggressive price + great condition + equity = sold.
Alternately, I have another listing in a condo community that has a delinquency rate for the condo fees that are higher than Fannie/Freddie like so we lost a great buyer (an investor) who had a great offer that the Sellers loved. The new and improved mortgage environment killed the deal.
I guess what I am saying is that there are so many variables that go into home sales that I’m not surprised there are so many different opinions on why things are and how they’re going to be. You know what they say about opinions….
Justin Boland
May 27, 2010 at 8:59 am
Really appreciate the perspectives in the comments section here — thanks, folks.
Bruce Lemieux
May 27, 2010 at 9:20 am
There’s a ton of confusion and conflicting indicators In this very choppy real estate market, Know your local market — by price range, by area, by neighborhood, by home style. Know the metrics. Watch the inventory, rate of contracts, days on market. Understand why some homes are selling and some are sitting in your market. With that insight, we can actually – gasp – provide meaningful and extreme value to our clients right now. This is a great market for agents who know what they are doing.
Denise Hamlin
May 27, 2010 at 10:19 am
Like Greg I too wish the news was just the news. Too many so called experts being way too vocal makes it confusing for us and downright misleading for the general public.
Our job is to go out and educate our clients one at a time. You’re right. Real estate is not universal, it’s local. It always has been and always will be.
Granted, right now it’s a challenge to get through all the noise. That makes it all the more interesting though and a great opportunity for agents who know what they’re doing!
Marc Knight
May 28, 2010 at 10:59 am
Interesting comments. I guess it all boils down to your own ideas and perspectives; the market will turn around again and always provide us with new challenges!
Greg Cooper
May 28, 2010 at 3:34 pm
Thanks for contributing all. One of my points is that I think we’re in a different world today than even a few short years ago before the crash. The politization of EVERYTHING has made our message more challenging. Opinions rather than facts are glammed onto by our clients as a source of some hope when the market data still says otherwise, especially in the non conforming markets. I’ve never been so surprised as I have been in the last 18 months when clients will recite something off of MSNBC or FoxBusiness that is totally opposite of the market data that I have printed and in front of them. We have to work incredibly hard to stay in front of the world’s message if we are to set realistic expecations for our clients and customers. Makes little things like our blogs and staying in front of our prospects all that much more important.