If you like my upbeat and relatively snarky but often positive posts, this one might not be a favorite of yours but as a business woman, I noticed a few puzzle pieces coming together today. So my apologies for being a downer.
We are in the cross-hairs of a rather large storm. Late last Fall I started warning my friends in real estate to batten-down-the-hatches – there’s a big storm a brewing. I did not want to be right. It appears as though I might be right.
The numbers for home sales in July came in recently. Ouch. Down 36% from June. That is a bit terrifying in my opinion as a real estate salesperson. I had begun giving my prediction of this year in October of 2009, when I first got wind that the Government incentives and tax programs were going to go away or be modified. I had taken the position that come July 1, 2010 we would be looking at some big trouble.
The last two weeks have perked my ears up a bit. Looking at the showing appointments on my listings, the responses from calls to “active” buyer clients as well as other general indicators, definitely piqued my interest. The Storm is here and is at least a category 4 with the current barometric readings we may be looking at category 5.
Mortgage rates are ridiculously low. Home prices are still close to bottom (or so we thought). Those two factors alone usually indicate a strong buying market. Then there are these other indicators: Sales are down, showings are down, refinances are up. Not quite the perfect storm, but darn close. How can those two sets of indicators exist in the same market? Aren’t they normally completely contradictory?
Apparently not. I am not an economist but I am a natural observer of the real estate market. What I see is potentially a devastating storm, and turn of circumstances. The Government has decided to no longer back the dream of homeownership. People are predicting further tightening of the mortgage industry. There seems to be a lot of doom and gloom, and for a normally “shiny happy” person, it has made me rather pensive.
Predictions are Worthless
My crystal ball is a bit foggy at the moment. What I can see clearly is trouble on the horizon. Real estate agents – time to make like a boy scout and be prepared. To weather this storm you will need to be seasoned in a variety of market conditions and have the financial means to wait it out. There will be further attrition in the ranks, which is still needed, that in turn will lead to what we saw in 2009.
After the 2007 downturn began there was a veritable “rats fleeing from the sinking ship” effect on the industry. Many of the fair weather real estate agents left the business. One of my previous brokers made an astute prediction in 2005, he saw it coming, and wisely said “[then] you just had to be there, now you have to be good.” In 2009 I had a record year in a down market, 2010 has been nice to me as well. Based on my past experience 2011 should be a record year.
First, we all have to weather the storm. It will take till October to see the attrition start industry wide, but it will get here. I predict that many of us will see record setting years showing their evidence by April 2011. The difference between the last great real estate exodus and this one is what the social media platforms, and dominance, offer some of us. Survival of the fittest.
We will see if I am correct. Personally I hope I am wrong about it all. I am not usually wrong. Just ask my Husband. Now if you will excuse me, I have to go blow up my water-wings.
What are your predictions?