COVID19 and real estate

Hello friends,

While it might be surprising to many, banks are being inundated with applications for new mortgages.  This is largely due to the fact that real estate markets, with the notable exception of the 2008 recession, are generally minimally effected by recessions or extraordinary events such as COVID19.  Real estate prices move one way or the other based on the interplay between supply and demand.  And right now, even though March 2020 closings are about 25% below March 2019 closings, prices are still remaining stable and in certain areas actually increasing!  How can this be?  Well, as it turns out many sellers and would be sellers are keeping their homes off the market because they’re concluding that this is not a good time to sell.  The net result of this hesitance to sell now is causing a noticeable decrease in the amount of available housing inventories, and that places upward pressure on prices.

See here: https://www.yahoo.com/money/mortgage-applications-for-home-purchases-spike-despite-pandemic-200710195.html

So if you’ve been considering making a move, please know that’s it’s still indeed possible.

Whenever we’re considering bringing a home to market, it’s worth taking note of the overall local and national socio economic conditions, and how those factors could potentially effect consumer behavior.  I make it a point to continually keep tabs on what people are reading so as to be able to intelligently address buyer objections.  The question has come up in recent weeks about what the Coronavirus could do to real estate markets.  Fact is, no one really knows.  Commodity markets, of which real estate certainly is, do not like uncertainty.  We’re seeing the effect of such on the stock market.  Real estate markets will take longer to react, if at all, because it’s not an investment that you can quickly get in or out of such as stocks of bonds.  As the ten year treasury note is seeing historically low yields, and since mortgage rates tend to mirror the ten year note, both new mortgages and refinancing rates are presently near historic lows.  This bodes well for the prospective buyer pool and it could yield a spike in home sales in the short term.

 

Here’s one take on the Coronavirus situation: https://www.fool.com/millionacres/real-estate-market/articles/how-the-coronavirus-could-impact-the-american-real-estate-market/

 

And that’s what’s on my mind today….

Working with Carlos

Working with Carlos VI: http://youtu.be/amS58pRWd1U

How we feed the public's negative view of real estate agents

I'm normally not the one to complain about my colleagues nor post anything negative online but my experiences this morning with so called "luxury listing agents" have me so disappointed in my industry that I've just got to vent!  It's no wonder the public often sees us as glorified used car salesman (no offense to my used car salesman colleagues; I know some darn good ones).

So I showed four luxury homes this morning and here are my observations:

• home number one- the listing agent opens the door, dogs barking, kids running around, house is dark, cluttered, and the owner is following us around
• home number two-the listing agent shows up in a low cut blouse and skin tight pants. Really?  Are we marketing luxury homes or going out clubbing?
• home number three-the listing agent doesn't even both to show up, the house is dark, the owner is home, the dog's running around, and the owner is giving away her bargaining position by simply talking too much!
• home number four-(and this one's my favorite) the listing agent opens the door, we introduce ourselves. Then the listing agent turns to the owner and asks her...................wait for it........................"would you like to show the house or should I?"

I guess today's showings leave me both sad and encouraged.  Sad because these folks have absolutely no clue the harm that they're doing to our industry.  And encouraged because if this is my competition, then the sky's the limit for me!

Predictable Equilibrium Part Deux

Just thought that you'd might like to know that I've noticed a small change in the Country Club of Miami these past few weeks.  There have been at least four price reductions of on market listings in the neighborhood.  Now this is not necessarily a cause for alarm, yet it is indeed an indication that the local market may have gotten a little ahead of itself.  The recent interest rates increases could bear some of the blame, and the imbalance of supply and demand that's driven the double digit increases over the past 18 months seems to be easing.  One of my colleagues that works in West Broward has also noticed this in his local market.  That being said, I feel that we're on the cusp of a return to a more balanced market with historically conservative appreciation levels , heading towards a phrase I coined in 2009; predictable equilibrium.  Here's where I wrote about this back then in my blog: http://bitsaboutrealestate.blogspot.com/2009/07/predictable-equilibrium.html

Poppin!

What can I say, the real estate market is popping!  My big challenge today is simply in finding homes for all of the prospective buyers out there.  Yet, industry experts agree that it won't stay this hot for much longer.  The double digit price increases that we're experiencing right now a function of a noticeable imbalance between supply and demand.  Yet as more homeowners are now in a positive equity position thereby allowing them to move up or down, interest rates continue to creep up, and much of the new home inventory gets closer to completion, we will be in a more balanced marketplace as we enter 2014.  And price appreciation will naturally abate to a more historically relevant rate.

 

There is a unique window of opportunity in today's marketplace to sell for top dollar.  Yet like all windows, this one, for the reasons mentioned above, will close.

time to get off the fence Amigos!

NAR: Pending sales at two-year high