Lisa Lambert, Esq. (1031 Exchange Expert),
Agent, Fresno, CA
Andy:
When you first asked this question back in October, we were only seeing the tip of the iceberg. Yes, of course, the media has sensationalized the negative events. However, as Lazarus pointed out, the fact is the market is worse than it was in 2004-2005.
We can't "do" anything about the market. The only thing we have control over is our attitude. We can have a positive attitude while still recognizing the facts of the market.
As an attorney who works in a related industry that has been affected by the downturn, I have had the opportunity to observe the agents who embrace the "doom and gloom" and who's only strategy is to wait it out. They have embraced the doom and gloom reality and unsurprisingly business is terrible for them.
On the other hand, I have seen agents who see this market as an opportunity. They have analyzed the market to find out who is buying. Lower prices mean first time home buyer may be able to truly afford a home with a conventional loan. It also means that the product is also attractive to investors. They have adjusted their entire business model to attract these buyers. Unsurprisingly, they are experiencing some of their best business years ever.
Your information regarding Sandy Darling's interview with ABC30 does highlight a very important fact. If you are buying your home to live in it for the next 5 - 7 years, it will appreciate it and it's a great buy now, regardless of what the market does in the next 18 months.
Most of the people who are in trouble now, they purchased more home than they could afford, they used the equity in their home like an ATM machine, or they didn't use a realtor when they purchased. I am not a realtor but I will certainly use a realtor when I buy (even though I'm an attorney).
Frankly, I don't bother reading the media reports. I talk to the people who are actually working the market.
When you first asked this question back in October, we were only seeing the tip of the iceberg. Yes, of course, the media has sensationalized the negative events. However, as Lazarus pointed out, the fact is the market is worse than it was in 2004-2005.
We can't "do" anything about the market. The only thing we have control over is our attitude. We can have a positive attitude while still recognizing the facts of the market.
As an attorney who works in a related industry that has been affected by the downturn, I have had the opportunity to observe the agents who embrace the "doom and gloom" and who's only strategy is to wait it out. They have embraced the doom and gloom reality and unsurprisingly business is terrible for them.
On the other hand, I have seen agents who see this market as an opportunity. They have analyzed the market to find out who is buying. Lower prices mean first time home buyer may be able to truly afford a home with a conventional loan. It also means that the product is also attractive to investors. They have adjusted their entire business model to attract these buyers. Unsurprisingly, they are experiencing some of their best business years ever.
Your information regarding Sandy Darling's interview with ABC30 does highlight a very important fact. If you are buying your home to live in it for the next 5 - 7 years, it will appreciate it and it's a great buy now, regardless of what the market does in the next 18 months.
Most of the people who are in trouble now, they purchased more home than they could afford, they used the equity in their home like an ATM machine, or they didn't use a realtor when they purchased. I am not a realtor but I will certainly use a realtor when I buy (even though I'm an attorney).
Frankly, I don't bother reading the media reports. I talk to the people who are actually working the market.
Randy McAtee,
Broker, Fresno, CA
Look, the news media reported skyrocketing home prices when prices were rising BECAUSE PRICES WERE RISING.
THE NEWS IS WHAT IT IS.
Too many real estate agents have conspiratorial idea that the media is to blame for what is happening in the market. That's just not the case. Furthermore real estate agents try to whitewash the facts as though somehow they can prop the market.
I LOOK FOLKS STRAIGHT IN THE EYE AND TELL THEM THE MARKET SUCKS!
of course, that's not news to them.
THE NEWS IS WHAT IT IS.
Too many real estate agents have conspiratorial idea that the media is to blame for what is happening in the market. That's just not the case. Furthermore real estate agents try to whitewash the facts as though somehow they can prop the market.
I LOOK FOLKS STRAIGHT IN THE EYE AND TELL THEM THE MARKET SUCKS!
of course, that's not news to them.
Web Reference: http://www.bloggingbroker.com
Andy Nazaroff,
Agent, Fresno, CA
If your BUYERS are BUYING into what the MEDIA is SAYING – read this . . .
I recently had a conversation with my good friend Sandy Darling about an interview that she had with Dale Yurong of ABC30 here locally. I heard that Sandy did a fantastic job of presenting some of the “rest of the story” that the media was not quoting about our market. I wanted to ask her about her comments.
I am sure that many of you have heard a buyer say, “We want to wait and see what the market is going to do.”
Or they’ll ask you, “When do you think the market is going to go back up?”
Or, even worse, “I read in the news that the market is horrible and the bubble has burst and all these foreclosures are just going to get worse and what if I buy this home and it loses value and . . . “
You get the picture.
Sandy had some great points to address these negative thought patterns that buyers concoct. Think about these points. Let me know if you find them useful with your buyers.
1.) If buyers are waiting for the market to bottom out - they aren't going to know it until it's coming back up . . . Which usually takes 6-9 months to track it.
We see a downward trend at the moment - we will not know it's ended until its moving back up.
You can use several indicators to track this, for example: Days On Market is getting shorter, inventory is decreasing . . . But by the time you can track it, or by the time people start to take notice – it’s too late.
2.) If you're buying your home as YOUR HOME - as your residence to live in – for a normal period of time, then it isn't only an investment anymore . . . we're talking about a true homeowner . . . then catching the bottom shouldn’t be the issue. We’re not trying to discount an investor buyer here. This is the perfect storm in reverse - the perfect calm for the buyer. It puts them in a very negotiable position with the huge amount of inventory to choose from. It may give them very favorable pricing, and the interest rates are so desirable. That combination for a home buyer is UNBEATABLE. If they're going to be in the home for the long haul - why not start enjoying the tax incentive now?
3.) If they are holding the property for a normal period of time appreciation will be there as it has historically. It’s always been there over the long haul. Prices may relax a little further, but what if interest rates go up . . . It's a push.
If inventory shrinks a little – the buyer loses selection, or choices and then prices usually go up which may reduce the buyer’s negotiability.
So – right now there are plenty of properties to choose from, great interest rates, and a good host of motivated sellers . . .
4.) Regarding the media sensationalizing the negative news – there are some interesting statistics to point out to your buyers.
You may have heard numbers like we have 25% fewer sales this year over last year. While that may be true, that actually helps a buyer.
Consider also the VALUE in a home:
In January 2007 the median price home SOLD was $284,900. (based on SFR & condos in Fresno & Clovis from the Fresno MLS)
In July 2007 it was $289,500. That’s a $5k raise!
In July 2006 to July 2007 the median price only dropped 5%. Is that a market in the tank?
5.) Another thing to mention is that Fresno gets lumped altogether into the "Central Valley" combining it with more depressed markets like Bakersfield, Merced, Chowchilla, and others. Their poor markets affect the way Fresno is portrayed - generalized. There’s usually much more to the statistics than what is being portrayed.
I recently had a conversation with my good friend Sandy Darling about an interview that she had with Dale Yurong of ABC30 here locally. I heard that Sandy did a fantastic job of presenting some of the “rest of the story” that the media was not quoting about our market. I wanted to ask her about her comments.
I am sure that many of you have heard a buyer say, “We want to wait and see what the market is going to do.”
Or they’ll ask you, “When do you think the market is going to go back up?”
Or, even worse, “I read in the news that the market is horrible and the bubble has burst and all these foreclosures are just going to get worse and what if I buy this home and it loses value and . . . “
You get the picture.
Sandy had some great points to address these negative thought patterns that buyers concoct. Think about these points. Let me know if you find them useful with your buyers.
1.) If buyers are waiting for the market to bottom out - they aren't going to know it until it's coming back up . . . Which usually takes 6-9 months to track it.
We see a downward trend at the moment - we will not know it's ended until its moving back up.
You can use several indicators to track this, for example: Days On Market is getting shorter, inventory is decreasing . . . But by the time you can track it, or by the time people start to take notice – it’s too late.
2.) If you're buying your home as YOUR HOME - as your residence to live in – for a normal period of time, then it isn't only an investment anymore . . . we're talking about a true homeowner . . . then catching the bottom shouldn’t be the issue. We’re not trying to discount an investor buyer here. This is the perfect storm in reverse - the perfect calm for the buyer. It puts them in a very negotiable position with the huge amount of inventory to choose from. It may give them very favorable pricing, and the interest rates are so desirable. That combination for a home buyer is UNBEATABLE. If they're going to be in the home for the long haul - why not start enjoying the tax incentive now?
3.) If they are holding the property for a normal period of time appreciation will be there as it has historically. It’s always been there over the long haul. Prices may relax a little further, but what if interest rates go up . . . It's a push.
If inventory shrinks a little – the buyer loses selection, or choices and then prices usually go up which may reduce the buyer’s negotiability.
So – right now there are plenty of properties to choose from, great interest rates, and a good host of motivated sellers . . .
4.) Regarding the media sensationalizing the negative news – there are some interesting statistics to point out to your buyers.
You may have heard numbers like we have 25% fewer sales this year over last year. While that may be true, that actually helps a buyer.
Consider also the VALUE in a home:
In January 2007 the median price home SOLD was $284,900. (based on SFR & condos in Fresno & Clovis from the Fresno MLS)
In July 2007 it was $289,500. That’s a $5k raise!
In July 2006 to July 2007 the median price only dropped 5%. Is that a market in the tank?
5.) Another thing to mention is that Fresno gets lumped altogether into the "Central Valley" combining it with more depressed markets like Bakersfield, Merced, Chowchilla, and others. Their poor markets affect the way Fresno is portrayed - generalized. There’s usually much more to the statistics than what is being portrayed.
Dena Parker Williams,
Agent, Tennessee
Real estate is local and should not be lumped in such a big national bucket unless the whole market really does follow the same direction. It seems that when it is described as a whole that the markets do end up following that claimed trend to some extent because of the panic it creates among the people.
Web Reference: http://homenashvilletn.com
Ian Cockburn Broker,
Broker, 70115
Fear sells...and fear sells media advertising because it attracts attention. A perfect example is the perception the media has created about New Orleans...poor people roaming the empty streets... .Right now there is $2 billion worth of development within 1 mile of the French Quarter. You won't ever see this on the news because the sound of pile driving and Realtors getting contracts signed is boring.
And what is so scary about a ball point pen on paper? That will not generate advertising...but a story about weapons of mass destruction in a country with a name most of the reporters can't pronounce makes news 'cause its "scary!!!!" and nothing fuels the general populous like fear...it is a basic proven advertising technique.
And so I don't sound like a hypocrite I use it too, such as, "Omigosh...where else in the world can you get a good cup of coffee, a Bloody Mary with a Cajun green bean, real seafood gumbo, and listen to live local jazz before 9:00 am, 7 days a week, 365 days a year...all within a mile of your house?' I would be afraid to leave all that culture and cooking!
And what is so scary about a ball point pen on paper? That will not generate advertising...but a story about weapons of mass destruction in a country with a name most of the reporters can't pronounce makes news 'cause its "scary!!!!" and nothing fuels the general populous like fear...it is a basic proven advertising technique.
And so I don't sound like a hypocrite I use it too, such as, "Omigosh...where else in the world can you get a good cup of coffee, a Bloody Mary with a Cajun green bean, real seafood gumbo, and listen to live local jazz before 9:00 am, 7 days a week, 365 days a year...all within a mile of your house?' I would be afraid to leave all that culture and cooking!
Web Reference: http://iansellsnola.com
Deborah Madey,
Agent, Red Bank, NJ
There is more competition in news media today than 10 or 20 years ago. As a result, news has become less about journalistic fact, and more about drama. This is true as it applies to all facets of reporting.......real estate, weather, etc.
I try to explain to clients that the news is drama, and without drama they sell less advertising, and their ratings suffer. It is essential for the media to dramatize.
It is essential for me to provide accurate data. Next week, next month and 5 years from now, I will be in real estate and around the corner and accountable. I won't sugar coat the negative, nor over dramatize it, and I will provide facts.
In several of the communities I service, volume of transactions are up, though selling prices are down. In certain areas, volumes of transactions are down. I will provide these unbiased facts in detail for my local market to clients to help them better sort fact from fiction
I try to explain to clients that the news is drama, and without drama they sell less advertising, and their ratings suffer. It is essential for the media to dramatize.
It is essential for me to provide accurate data. Next week, next month and 5 years from now, I will be in real estate and around the corner and accountable. I won't sugar coat the negative, nor over dramatize it, and I will provide facts.
In several of the communities I service, volume of transactions are up, though selling prices are down. In certain areas, volumes of transactions are down. I will provide these unbiased facts in detail for my local market to clients to help them better sort fact from fiction
Julia Huntsman,
Broker, Long Beach, CA
I think the first two answers have merit ... Another way of looking at the media issue is that it successfully prints and sells stories because people buy into bad news, and people buy into it because most people are ready to buy into anything negative or fearful. The ones that don't do that are the successful investors.
Richard M. Johnston,
Agent, Sherman Oaks, CA
Hi Andy, there is too much unrealiable information online and in print. But they are causing an effect on the general public because I think they have more trust in the news than their own Realtor.
Michelle Carr-Crowe, ABR,ACRE,ALHS,ASP,CDPE,RECS,SRES, Top 5% US RE Agents,
Agent, Cupertino, CA
NAR just posted a great article - called something like "the news that doesn't make the news" - 97.4% of homeowners make their loan payments on time.
Reminding clients that the media is in the business of selling stories--as long as the stories sell papers or get TV viewers, the stories will continue.
Just keep selling...
Reminding clients that the media is in the business of selling stories--as long as the stories sell papers or get TV viewers, the stories will continue.
Just keep selling...
Web Reference: http://www.michellejudycarr.com
Susan Savage,
Agent, Clovis, CA
Unfortunately the media continues to fuel the negative aspects of the market and in turn the slow down. Yes, there are a greater number of foreclosures and short sales than we've seen in a number of years but there are a great number of homeowners (97%+) who continue to make their payments on time and enjoy personal home ownership. The media has focused on the "housing crisis" as means to sell papers and increase TV news viewership. Actually there still remains a constant in real estate, of folks that buy and sell homes for personal reasons, i.e. job relocation, move up to larger home or downsizing empty nesters, etc. I believe that buyers should seriously consider taking the opportunity now to make their home purchase. With home prices lower than they have been the past few years and currently low interest rates (as of 5/1/08), it is an advantageous time to consider buying. We never know what the interest rates will do in three to six months from now and a higher interest rate could price a buyer out of a home that they might purchase today.
Blah,
Agent,
Sylvia Barry: no, not everyone is right. With respect to the economy, what do you know about economics? As with over 80% of the licensed real estate brokers/agents, I highly doubt you know much about where the economy is headed. I apologize if I'm so blunt. The truth is, most brokers/agents are clueless about real estate; so why should anyone listen to them about their views on the economy?
Sylvia Barry, Realtor, MAS, ePRO,
Agent, Marin County, CA
Hi Blah, you are right, and R. Jazarus is right and Andy and others are right also.
Real Estate is local. Some markets are doing great, some locations within a market are doing great, some are doing O.K. but the market is tough in most areas, the prices have dropped, and will continue to drop in certain areas, but not others.
You can't deny it, the media does sensationalize news to draw readership. There are also good news http://www.trulia.com/voices/Market_Conditions/Foreclosure_f…
I am sure you will dispute that, but it's O.K. always good to get different opinion.
To me, I have been doing fine this year, my company's production level stayed almost level (a drop of 2% in sales volume this year-to-date), so that's great among gloom and dooms. And my clients, if they don't buy/sell homes right away, they will come to me when they do, so I don't have to say optimistic things so I can sell more homes.
So, I really don't have to jump in and say all these just because I am a Realtor; but I am more worried about the economy in general where Housing is a huge part of it.
If we can't contain this, then there will be huge problem for the country in general' and I sincerely hope that won't happen. So, yes, I do want the paper to be fair to spread the good news just as they do to the bad news.
Sylvia
Real Estate is local. Some markets are doing great, some locations within a market are doing great, some are doing O.K. but the market is tough in most areas, the prices have dropped, and will continue to drop in certain areas, but not others.
You can't deny it, the media does sensationalize news to draw readership. There are also good news http://www.trulia.com/voices/Market_Conditions/Foreclosure_f…
I am sure you will dispute that, but it's O.K. always good to get different opinion.
To me, I have been doing fine this year, my company's production level stayed almost level (a drop of 2% in sales volume this year-to-date), so that's great among gloom and dooms. And my clients, if they don't buy/sell homes right away, they will come to me when they do, so I don't have to say optimistic things so I can sell more homes.
So, I really don't have to jump in and say all these just because I am a Realtor; but I am more worried about the economy in general where Housing is a huge part of it.
If we can't contain this, then there will be huge problem for the country in general' and I sincerely hope that won't happen. So, yes, I do want the paper to be fair to spread the good news just as they do to the bad news.
Sylvia
Web Reference: http://www.FirstMarinHomes.com
Blah,
Agent,
WARNING TO THOSE WHO ARE READING THE RESPONSES BELOW:
Although the media may exaggerate and/or embellish "news," please do not fail to realize who are responding to this question: REAL ESTATE BROKERS/AGENTS. Their perspectives and opinions are biased and, thus, can certainly skew the bona fide conditions of today's real estate market. These individuals have incentives to spur activity in their industry so that their careers and professions will no longer suffer or be in jeopardy. R. "lazzarus" Mcatee's response may be blunt but it's true. The real estate market in general is distressed and depreciation is accelerating. I'm sorry to spoil the fun; however, those who understand the underlying principles of economics can/will comprehend the extent of damage that's headed our way. I can go on and on with hard data and facts that support my thesis, but honestly, I don't have the time to present them on this board. Besides, most of the information would probably go straight through most people's heads.
Although the media may exaggerate and/or embellish "news," please do not fail to realize who are responding to this question: REAL ESTATE BROKERS/AGENTS. Their perspectives and opinions are biased and, thus, can certainly skew the bona fide conditions of today's real estate market. These individuals have incentives to spur activity in their industry so that their careers and professions will no longer suffer or be in jeopardy. R. "lazzarus" Mcatee's response may be blunt but it's true. The real estate market in general is distressed and depreciation is accelerating. I'm sorry to spoil the fun; however, those who understand the underlying principles of economics can/will comprehend the extent of damage that's headed our way. I can go on and on with hard data and facts that support my thesis, but honestly, I don't have the time to present them on this board. Besides, most of the information would probably go straight through most people's heads.
