Real Estate Outlook: What’s in Store for 2009?

 Written by Kenneth R. Harney

What will the new year bring for housing and real estate? It’s easy to look at all the negative economic news in the headlines and say – there’s no sign that 2009 is going to be any better than 2008.

But here’s a different perspective to consider from one of the country’s veteran financial analysts — Richard Bove of Ladenburg Thalmann, an investment banking company.

In a research report issued late in December, Bove said he sees a positive dynamic taking shape in the current cycle. The government has intervened aggressively in the markets to push interest rates down — most notably in the home mortgage sector.

Though it takes awhile for low-cost money to begin having its effect, Bove said he expects “housing prices to stabilize and/or rise (in 2009) after a likely boom in mortgage refinancings as rates fall and loan applications increase.”

Add in the expected massive economic stimulus package being put together on Capitol Hill with the incoming Obama administration — and there’s a good chance we’re going to see a gradual transformation of the downward cycle into a slow rebound over the coming several quarters.

Already there are positive signs of the turnaround Bove predicts:

     

  • Mortgage applications are off the charts, mainly for refis but also to buy houses at affordable prices. 
  • Rates continue to hover at 50-year lows – five percent and even four and three quarters percent for 30-year mortgages, and still lower for 15 and 20 year mortgage terms. 
  • Plus we’re all paying a lot less at the gas pump, and sharply discounted prices for retail goods and autos. 
  • And guess what? Americans are actually SAVING again, the national savings rate took a nearly three percent jump last month. That might sound small, but it’s hugely important if it is the start of a trend.

There are also some signs that housing prices are stabilizing in some parts of the country. The latest monthly Federal Housing Finance Agency index found home prices UP by six-tenths of a percent in the Mountain states and UP by two tenths of a percent in New England.

You can ridicule small regional gains as statistically irrelevant, but here’s an economic proposal to you for the New Year: Keep your eyes open for the small positive signs that are accumulating out there … because all downcycles tail off and come to an end.

The smartest players in real estate — consumers and the industry – will make the most of the positives — low-cost money, low prices, stabilizing local markets — and thrive in the new year.

 

~  Thank you, Kenneth!

 


Althea Garner
REALTOR (R) MBA, MCI, e-Pro
Executive Real Estate
House Of Homes Online
DRE 01516817
(714) 264-3458

Search over 50,000 listings at my web site:
http://www.HouseOfHomesOnline.com

Women’s Council of REALTORS(R):
Treasurer – 2008 (Coastal-West)
Webmaster – 2009 (Long Beach)
Editor – 2009 (Long Beach)
Education Committee – 2009 (California State)

Orange County Association of REALTORS(R):
Education Vice Chair – 2009

 

 

 

 

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The Start Of The Real Estate Year

The start of a new year is always busy and certainly for me, the state of  ‘mass hysteria’ only calms down around tax time – mid April.

The normal causes for being busy, usually revolve around the aftermath of the holidays, the setting up of the new years systems and preparation for Spring buyers, but this year was different.

First, let’s consider my life this time last year:
Aside from the usual causes for being busy, we had just sold our house in Fountain Valley and on February 17th, we were 2 days from moving to Signal Hill.  It was hard to down-size, but after 3 garage sales, we were left with mainly boxes.  We dumped our boxes in our new home and took off for the Bahamas! Seriously….  we didn’t open a single box!

So far, this year has included:
~ Christmas with my parents-in-law in San Diego

~ New year with the kids in Sacramento and San Jose

~ A Women’s Council Of REALTORS(R) State conference in Monterey

~ A week of being office bound, while my Broker did jury duty

~ Wrapping up 2008, capturing, scanning and shredding 2008 documents

~ Tax preparation

~ Seeing our vacation rental in the mountains, through a busy snow season

~ Setting up 2009 systems

~ Training, being tested and becoming certified for Foreclosure business

~ Listing a property in Garden Grove

And it’s ALL DONE!  Yay!  AND we’re only 7 weeks into the year!

I will admit that a large part of my time has been spent maintaining a paperless office, but I can tell you that when we get busy,  the paper can mount up in no time.  Today, for the first time in 3 months, I can actually see the wood surface of my desk and you have NO idea how good that feels!

With the property market picking up during the first week of the year, real estate has been extremely busy, too and every day starts with a ton of phone calls to get back to those wishing to buy or sell. I try to work with only 6 clients at a time. Realistically,  any more than that and I am not devoting quality time to any of them. Right now, I have 37 active clients on my books and am in dire need of paring back.  Some of these clients will disqualify themselves, by virtue of the fact that they didn’t qualify for a loan or the market isn’t in a good place for them to sell,  so these clients will be placed on hold till later in the year, as we repair their credit, allow them time to save a little more or simply allow the sellers time to de-clutter their homes in preparation for listing.

Still,  all things considered, it has been a dynamic start to the year and I truly believe that 2009 is going to be an excellent real estate year!

Happy house-hunting!

 


Althea Garner
REALTOR (R) MBA, MCI, e-Pro
Executive Real Estate
House Of Homes Online
(714) 264-3458

Search over 50,000 listings at my web site:
http://www.HouseOfHomesOnline.com

Women’s Council of REALTORS(R):
Treasurer – 2008 (Coastal-West)
Webmaster – 2009 (Long Beach)
Editor – 2009 (Long Beach)
Education Committee – 2009 (California State)

Orange County Association of REALTORS(R):
Education Vice Chair – 2009

So you think that REALTORS(R) can’t understand?

Many perceive REALTORS (R) as high income earners who are far removed from the effects of the recession.  There are those who believe that REALTORS(R) work only 3 hours a day and spend several weeks on some tropical island, every year. Some believe that to be a REALTOR(R), one has to drive a Mercedes or a Lexus in order to be successful.

Let me put the record straight!

Firstly,  I drive a black Ford truck.  Yup,  I am a truck kind of gal and I bought local!  Made in the good ole US of A!  And you know what?  It’s not always as clean as I’d like because I live close to the ocean and the birds like to (shall we say ) ‘drop’ on my car?

Still,  even though I don’t drive a luxury vehicle,  it’s paid for!  IN FULL and I am extremely proud of that, considering that I settled the balance of almost $5000 in one check!

So,  that said, you’re probably thinking that REALTORS(R) are ‘flush’ with their cash flow and especially since I paid my truck off, I must be ‘in the money’?

WRONG!

I have not escaped the recession and for me,  the big black cloud looms just as truly for me as for you!  I wrote three Offers last week and none of them saw an Escrow opened, because the buyers either changed their minds (because they were just plain scared) or they had no intention of buying, anyway (we see a lot of that).

It’s understandable to be scared in this ecomony – I mean, none of us really knows what tomorrow will bring! Yet, that said, we have to understand what got us here in the first place:

When the economy shows signs of stress, people get nervous and they stop spending.  When consumers stop buying, retailers stop stocking and when retailers stop stocking, manufacturers stop producing.  With a dowturn in manufacturing, there are layoffs,  which create unemployment, which further curbs spending and the cycle begins again.

Thus is the nature of our recession.

REALTORS(R), while they are perceived as high income earners, are the target of recessionary thinking – “If I have to take a drop in sale price on my house, then you must take a drop in percentage”.  OK……  If the seller sold for a million dollars in good times, a regular brokerage fee (it doesn’t all go to the REALTOR, BTW), would be 3%, making the brokerage fee $30,000.  In the present market, that same house would probably sell for about $650,000 – a brokerage fee of 3% would be $19,500 – quite a difference, yes?  Yet STILL, we are being told that WE must tak a hit on our commission? WHY?

I say that with the lowered selling  price, we already are!

Still,  there are cut-prce REALTORS(R) out there, quite prepared to put a sign in the ground for 2.5% of a reduced list price and then do nothing!  Such is the way of the world, I guess.

But please don’t think that we don’t understand what is going on around us.  Please don’t think that because we see lowered prices, short sales and foreclosures everyday, means that we don’t care.  Some of us are living through what you are experiencing, too!

We completely understand that you have mouths to feed and one of you has been laid off.  That the kids need medical treatment and you can’t make your car payment and/or your mortgage payment and are facing foreclosure.  And you wonder why no-one understands?

I DO!

You see,  I am a REALTOR(R) and I earn only only when I sell something.  My husband was laid off yesterday – yes,  his company made redundant everyone in his position … throughout the nation,  those top managers are now out of work.  After 12 years of loyal service, my husband was laid off – hey…  give me a couple of weeks to get my head around that, OK?  Still,  I don’t have a couple of weeks – my husband is a heart patient (3 heart attacks in two weeks, four years ago and another 2 just recently) and if he goes into another heart attack his surgery costs about $100,000!  We NEED medical insurance,  which pretty soon (like 2 weeks) we won’t have!  Right now,  I am working just to keep my husband alive!

No,  we don’t have children living at home, but we have one son who goes to college next year and 3 other dependants (as a result of a death in the family) who we have to support and one wonders, with buyers scared and sellers cutting commission, how we will manage.

Is this any different to the way that YOU are thinking?  Are my problems any different to yours?

I don’t have time to think of the ‘how’.  I am too busy trying to combat the fear in buyers and sellers and try as I might, I can’t seem to make people understand that I really DO care – I really CAN help them, because I understand what they are going through and I have the tools, skills and experience to assist them.

So,  if you believe that REALTORS(R) don’t understand what you are going through, think again!  I am not alone…..we’re right there with you, facing the same trials and tribulations – the same life’s challenges, health issues and financial burdens as you and we are also concerned as to how we will make ends meet.

I’m not going to pull the wool over your eyes – the economy is in a mess, but I’ll say this: it has to start somewhere and there really isn’t a better time to buy property than now when the interest rates are low and the property prices are pretty much bottomed out (see my next blog post from the CAR/NAR).  If you look at every other recession we have ever had,  the movement of cash started with the housing market, so the sooner we can get property moving,  the sooner we will get to freeing up some cash flow and people can get jobs again.

Unless we spend, this country will grind to a halt and if that happens,  the world economy will implode.  Is that what we want?  I agree that charity starts at home,  but to see the world starve because we are afraid to spend, is just plain short-sighted.

The December holiday spending was down on last year – January spending was up on the last 10 years!  Is this because consumers were buying on the sales?  Who cares!  Look at your budget and spend accordingly and if this means that you buy from the 99c Store,  that’s fine – just keep the money flowing!

Remember the stories of families eating beans 6 nights a week and as a treat, the seventh night was Spam, because that was the only meat they could afford?  Let’s get back to basics and do what is necessary to afford to pay our overheads and still keep the roof over our families heads. Keeping up with the Joneses is for those who want to go into foreclosure – let’s brainstorm as to how we can cut costs but still keep the economy flowing.

Any ideas?  I am looking forward to your input.

 


Althea Garner
REALTOR (R) MBA, MCI, e-Pro
Executive Real Estate
House Of Homes Online
(714) 264-3458

Search over 50,000 listings at my web site:
http://www.HouseOfHomesOnline.com

Women’s Council of REALTORS(R):
Treasurer – 2008 (Coastal-West)
Webmaster – 2009 (Long Beach)
Editor – 2009 (Long Beach)
Education Committee – 2009 (California State)

Orange County Association of REALTORS(R):
Education Chair – 2009

The ultimate insult to a prospective client

I was with a buyer this week – a lady who has had a hard life and simply wants to do the right thing by her family (she was looking in the $250,000 range and had $7,500 to put down).  We went out and looked at homes and came up with two properties that suited her.  An Offer was made.

During our 150 mile drive, looking at properties, she related to me that her listing agent had told her:  “Don’t be so dumb!” and that for this reason, she would not engage that agent to source a home for her.

Wow!  I can’t say that I blame her.  How can any agent be so pompous and condescending?

Hey, I know that the market is tough for most REALTORS(R) and that there are frustrations on both sides, but REALLY‘Dumb’?  Does this agent really want work?  And in this market?  Does he (and yes, it IS a guy!) expect that this seller will refer him to her friends and family? REALLY?

Who is this man kidding?  Has he forgotten that the SELLER pays his commission and that he is working for the BUYER?

Hey,  it’s hard enough to procure a client.  Then you have to build rapport – find commonality, show knowledge of the market, negotiations, etc…  this is not a piece of fish that they are buying, dripping in oil and vinegar and shrouded in today’s newspaper …  it happens to be the biggest purchase most people make in a lifetime.  You think they could be a little more polite, yes?  NOT!

Take this prime doozie:  ‘Whether it’s stocks or real estate it’s best to buy low now and sell high in later years. For those bottom feeders who think that prices might slip a little further, the only way you’re going to know if it’s the bottom of the market is when you look behind you and it’s already happened. Would you rather buy a house in a seller’s market or a buyer’s market?”

How can ANY REALTOR (R) refer to prospective clients as ‘Bottom-feeders’, and would any of you readers WANT to do business with her (and yes, this IS a woman – won’t call her a lady, though!)?

Being called a ‘Bottom-feeder’ doesn’t give the buyer the ‘warm fuzzies’, does it? “Would you rather buy a house in a seller’s market or a buyer’s market?”, she asks.   No,  I’d like to buy in a market where the agent does the job that they’re employed to do and not have to put up with her insults, THANK YOU! (That would be my answer….  how about you?)

And guess what?  Since she wrote that, THE MARKET SLIPPED EVEN FURTHER!  So much for expert advice!

True:  The buyer should have some idea of what they are looking for, within their budget, while maintaining some flexibility

True: The loan market is tough and agents must ask questions that sometimes make the buyer feel a little disquietened

True: It might take 150 miles in a car and 42 properties viewed to find the one that suits

True: It might take a few days to get an answer or to be pre-qualified

BUT YOU DON’T HAVE TO BE INSULTED AND YOU DON’T HAVE TO ENDURE THE AGENT’S FRUSTRATION!

Buyers:  You don’t have to do business with a REALTOR (R) who insults you!  Do your research and find one that fits with you, your personality, your lifestyle and standards of ethics – heaven only knows – we are ten-a-penny in this market…..  find one that makes you feel comfortable and excited about finding the RIGHT home for you!

YOU HAVE MY BLESSING TO DO SO!


Althea Garner
REALTOR (R) MBA, MCI, e-Pro
Executive Real Estate
House Of Homes Online
(714) 264-3458

Search over 50,000 listings at my web site:
http://www.HouseOfHomesOnline.com

Women’s Council of REALTORS(R):
Treasurer – 2008 (Coastal-West)
Webmaster – 2009 (Long Beach)
Editor – 2009 (Long Beach)
Education Committee – 2009 (California State)

Orange County Association of REALTORS(R):
Education Chair – 2009