As most of you know I attended the OtteauValuation Group’s Fall Workshop. The theme of the workshop was that “really the market is not bad if homes are priced right”. They have right pricing strategies that I explained in an informal office meeting on Monday and I will again go over the topic during the Nov 7th office meeting.Their assessment of what is going to happen is that prices will continue to decline another 10 to 15% from now until early 2009. So about 1.5 years. They also said that the sub-prime issue is overblown because the foreclosure rate is being misreported by almost 60%. I’m not sure exactly where they came up with this number but I will try and find out.My own view is that prices may decline by that amount but that it will happen sooner and that by mid year next we will start seeing more buying activity, especially if they are correct about the 60% over reporting on the foreclosure rate. If that’s true and that hits the media at will help. Also it looks like the Fed is poised to reduce interest rates again, plus there are lots of things going on to help home owners avoid foreclosure. Countrywide Financial just yesterday announced a plan to help homeowners restructure their loans based on “what they can afford to pay”. Also the federal government is stepping in with legislation to allow homeowner who file for bankruptcy to retain they homes. So I think that because it is in the best interests of everyone to not allow all these foreclosures to happen, that many won’t, which will shorten the down cycle.
What is your opinion? Post a comment.
From my observations the locked up demand for real estate is growing. There are lots of buyers looking and talking but very few making realistic offers. The main reason being is that the perception is that we are in for lower prices before things stabilize. All the talk out the sub-prime issue, banks, hedge funds, investment houses having to take write-offs to get these non performing assets off their books has hurt the market more than it should have, compounding the downward pressure on home values.The media has something to talk about and continues to hammer the public will a doom & gloom picture. This will continue! But remember that the media is always well behind the curve, meaning that they will not report an improving market until 3 to 6 month after the market starts improving. As I have been telling anyone who wants to listen, my feeling is the between March 1st of and June 1st of 2008 the market will have turned for the better. This will be obvious to us on the front lines but not yet to the media. We will have to be the ones to get the word out to our clients. Once the media get a whole of it we will once again be selling lots of real estate. Just last night I was waiting CNBC, the show how to become a millionaire, but this show was called how to become a billionaire because Donald Thump was the guest. Let me tell you something, this guy is sharp, he knows what he is talking about. One of the things he said was that the market will be improving in 3 to 6 months! He hedged in a little by saying maybe a year. But what he also said, that the next 3 to 6 months would be the next chance of your lifetime to buy real estate cheap and to make lots of money! So if Donald Thump, “Mr. Real Estate” is saying this, what do you think the general public will start thinking? As he makes the rounds he will continue promoting “it’s time to buy”. Others will pick up on that and it will snowball. Then after the market has bounced of the bottom the media will start to pick up on it and things start getting back normal. Being real estate agents we need to prepare for this happening. How long do you want to have a listing for? AT LEAST 6 MONTHS IF NOT LONGER! Go after expireds they will be money in the bank!! Get the discussed FSBO’S now before things turn around. Get out your mailers! Start talking about the impending turn around.
What do you think?
PS - This post was not proofed so don’t kill me.
Our resource web is a work in progress. We hope it will help all our current and future agents in successfully running their real estate business. Please feel free to post any suggestions, comments or questions.