Right now many sellers and buyers are uncertain about what is happening in the market. There is a lot of fear and uncertainty.Even in the Realtor community that uncertainty exists as probably half of those in the business today have never experienced a downturn in the market. On the other hand many of us have been through something like this before. For me in 1980-1983 and 1990-1995, both downturns were different and for different reasons.In the 80’s financing was impossible to get and interest rates on 30 year loans reached as much as 19%. Seller financing was prevalent and all kinds of creative things were going on and values remained firm.In the 90’s the Los Angeles area lost thousands of jobs as the aerospace industry went through a fundamental shift, coupled with the S&L crisis where many more homes than are predicted for this market went into foreclosure and were dumped on the market. These two events caused market values in Southern California to drop as much as 30% while they held firm in Northern California. Within 5 years Southern California had recovered their values and doubled over the next 10 years.
Now what does this all have to do with the Realtors role in today’s market. Well here is what I think you should know about your Realtor.
1. They possess the local knowledge. We deal with property transactions every single day and though national statistics may have shock value, local statistics paint a more realistic picture. And even embedded with local stats are micro markets and markets even vary from one price range to the next. In Napa and Sonoma Counties the values most generally affected are for properties valued at under $750,000.00. That is not to say there has not been some impact over that price, but the impact is less severe the higher up the value ladder you go. It is a function of affordability, higher priced properties are acquired by those who can more easily afford them and lower priced properties by those who frequently are stretching to get into them.
3. We also work very hard to tell the truth. That is, if a seller is motivated and pays attention to what is happening in the market (through comps, through the education and experienced perceptions of his/her Realtor), homes that are in the right locations, in above average condition and priced well are still selling quickly. Homeowners are still making tens of thousands or hundreds of thousands of dollars on their investment.
4. Many sellers who purchased their home more than 3 or 4 years ago are likely to still do very well at the end of a transaction. Those who purchased more recently will need to think very carefully about whether now is the right time to move. Again, a Realtor will help provide the tools to make that decision. We work with the facts, helping a client analyze the cost of selling vs. the cost of staying put. We really are here to help people negotiate best choices in the market — not just push them willy nilly to throw a sign in the yard.
5. If you are contemplating buying, consider the history of the real estate you are considering. When did it sell last? What is the value history of the property, the neighborhood, the community? Your Realtor can provide that information. How long are you intending to hold the property and why are you buying it? After every market drop there has been a dramatic recovery. It can’t be guaranteed, but what did your granparents or parents pay for property all those years ago. Try and maintain your perspective. If you think things will continue to decline in value and you wait until you think you know where the bottom is, chances are you’ll be too late.
I cannot tell you how many times we have seen buyers circling a property like sharks waiting to feed and all of sudden the price is adjusted and there are multiple offers on the table and everyone loses but one. If you have a value in mind, make the offer before that price reduction. You’re a lot more likely to get the property and be the only one negotiating with the seller for it.
Consider this, it is in this kind of market that you can begin the creation of wealth for the next decade. Why do you think that the high end of the market is holding up so much better than the lower end? Someone is still buying real estate out there.
Does that mean that we’re not seeing people who are squeezed? Who got into loans they couldn’t afford? Who are going to make some tough decisions in the next months? Of course not. But we certainly have reason to reassure the majority of the population that (one) the sky is not falling and (two) Realtors are professionally skilled at negotiating and making the most of the asset of a home.
This is not rhetoric. We constantly strive to educate ourselves about the market, by geography, by price-point, by financing, by client, by lifestyle, by school area, by developer, by amenities, by transportation… the list of variables is immense. In the past few months, we have had some of the best-known leaders in local real estate speak to us about the credit crunch, financing, home values, economic predictions, appraisals, negotiating, technology, and the list goes on. We hold weekly meetings to discuss issues facing our clients, and we do tremendous research to put it in perspective for them.
As you would trust your doctor or your lawyer, as your Realtor you have an educated advocate at your side. We want you, our clients to have a full view of what we do for and with you so that you feel you’re making the best choice possible about your investment in your property.
Comments (0)