It is December 11 and already after 6 pm. It is cold, rainy and dark. Like many Realtors across the country, I am at my desk putting in a long day to pull some transactions together, keep others together and identify some new business. (Sometimes I feel like a real estate transaction janitor). For almost 30 years, real estate has been my job and my passion. The cyclical economics of real estate remind me of the weather in New England. We have seasons: seasons of planting, harvesting, tending and hibernating. We have seasons of wet springs, warm summers, bountiful autumns, and raw winters. We know this in our bones. Furthermore, this economic winter is chilling us to the bone, but we will as we have get through this.
It has been a challenging year for everyone, with few exceptions. Whether you are a homeowner, a renter, a Realtor, it is a rare person who says this year has been easy. However, there are some rainbows out there if we look up. Interest rates are great. Think about it: You can obtain a 30 year fixed rate, conventional mortgage for less than 5.5%. The average price of a single family home has come down to under 218k, making housing more affordable for more families. Condominium sales were down this year, but average price went up a few thousand dollars. Additionally, the number of pending sales is up and inventory is down. There are some great deals out there and some investors are scooping them up. In short, these are encouraging signs in the middle of the real estate storm.
One important element is becoming apparent. There are fewer full time Realtors working now, but their value is becoming more obvious. Whether pricing, negotiating, staging, positioning, marketing, closing etc, professional experience will make a real difference. This is true with both the buying side and the selling side. Even in so called normal, traditional transactions it has become an exercise of immense patience, and persistence to complete the sale. Selecting a home is easy. Obtaining the financing and getting it closed is very challenging. Sellers are beginning to understand this new real estate reality, too: The interview questions have changed lately when making listing presentation. Pricing is still important, but many sellers are asking more questions: What do you do to stage? What is your marketing plan, specifically? The question of what is your experience has changed to how many houses have you sold this year? It is also strange as a couple of homeowners have asked if this is my full time job. Both buyers and sellers are asking about professional designations and what they suggest.
Finally, in a market with so many foreclosures and short sales, we are reverting back to a caveat emptor, buyer beware. These homes do not have completed seller’s disclosures. Often there is no water, heat or electric. They are very difficult to inspect and research. If those facts were not enough, add the fact that this category of property takes so much longer to negotiate and acquire. While there may be great opportunities, there are great challenges.
It is New England, so we will bundle up and get through the winter.
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