Carpe Diem Real Estate...Say goodbye to 2008 and welcome 2009....
Real Estate is the State of the Real Estate Market and the general Economy. It is no secret that we are in the middle of the Largest Single Housing Market Correction in the recorded history of Real Estate. Nationally the situation began in August/September of 2005, here locally I think it began in 2006. If we examine the factors that led us into the correction I think we can look for the signs that the market is normalizing.
The first segment of the market that slowed was the entry level market, as sub prime lending practices tightened the credit challenged began leaving the game. As the sub prime crisis spread to Alt – A and conforming paper the move up and middle income brackets slowed. Finally as housing started to drain the general economy the high end market slowed. I share this because there are things we can do to help stimulate the market.
** Encourage your representative in Washington to make the GSE Caps Permanent. If we all write our representatives Washington will respond.
** When communicating with your elected officials remind them that Housing and Real Estate represent 20% of Gross Domestic Product. The single largest factor in the GDP
Now that we know where we have been and where we are, how do we know when the corner is turning? The first thing to look for is watch the number of transactions and REO data. Nationally REO sales are increasing, that is a sign that there is demand. In some parts of the country general market activity is increasing. CAR expects that this turn is what is called a soft bottom, meaning these numbers may be inconsistent for a number of months bouncing from good to bad before a definite trend is established. Look for the middle and upper brackets to turn first. Traditionally known as the smart money these buyers are typically less impacted by sub prime and Alt – A paper.
Nationally and locally homes are selling, pricing is the key factor. Today’s buyer is looking for value. The demographics are very right for real estate. A growing immigrant population is entering the housing market at historically high rates, interest rates are still at historically low rates, and with all the bad news we are still enjoying one of the top ten real estate markets of all times – perspective is everything!
The keys to success in this environment are:
1) Surround yourself with great people. I was told today great sailors aren’t made in calm winds; surround yourself with those that want to be great.
2) Prepare Relentlessly – Today’s activities are tomorrow’s results.
3) Hold Yourself Accountable – The market is what the market is. The playing field is the same for everyone.
4) Have a Strong Belief in yourself and the value you bring to the Real Estate transaction
5) Be your own person. Don’t be afraid to swim against the current.
History has shown us that housing leads the country into tough economic times and housing leads us out of tough economic times. By the time the government recognizes and identifies an economic recession, housing has usually begun its rebound. Most creditable economists believe that the government will declare a recession very shortly. The media will report this as bad news. If so look to this declaration as a great sign of a turn around.