This is a real estate Blog I feel compelled to write. I am always struck by the comments I read on Active Rain and have to ask myself "Does the agent have any sense of reality? Have they ever sold anything?" I feel many in the real estate industry today do not have a clue what is taking place. You cannot stage away this market to make things happen, nor can you think it away with positive thoughts. You can feel the pulse in the Blogs and comments written. "Will real estate recover in a few months?" "If only we had DPA!" "We need lower rates!" The Irish have a saying for this and the saying goes "They haven't a clue!" We live in a very different day and age one that is not based in common sense, but is deeply rooted in emotions and wishful thinking. Society today is not a fact based society, and most decisions are made on impulse rather than weighing out pros and cons, or looking at the actual balance sheets. Agents and brokers suffer, but so do their clients for lack of sound advice. That erronious thinking is exactly what brought us to the precipice looking into the dark abyss.
For those that were lucky and fortunate enough to survive earlier down turns in the economy in the 70's, 80's and 90's...they we're blessed, and this current downturn does not compare in any shape or form to those times. However, there were many lessons learned. When you consider earlier times where people actually put money down before purchasing a home even they were not immune to troubled times. However what we are living through is much worse. There are no points of comparison in my own life. Over 50% of the mortgages written in the past few years had no money down. Down payments themselves were financed. 80/10/10, and DPA. The lesson? Don't hold your breath for a quick cure.
In the late 70's mortgage rates had jumped to about 9.75% for a 30 year fixed rate mortgage. We were in a transition period of adjusting from a high inflation left over from the Carter era. Most lenders and banks were not writing loans, you could call for weeks trying to find lenders, but there were not many takers. The terms? You have to have a minimum of 25% down, and pay your own closing costs. Proof of employment was a must, and you needed at least 6 months cash reserves. I forgot to mention, you'd also better be a depositor in the bank. By July of 1980 the mortgage rates for a 30% fixed rate mortgage were at 15.5% and rising. A 70K loan PITI was over $1500 a month. 25% down was the norm. Real estate sales were predicated on selling the tax advantage of the high mortgage payments, but the monthly budget dictated other wise. There was no rush to buy homes. By the late 1980's foreclosures and HUD homes were common. Many banks especially state savings and loans failed from bad real estate loans. Persons could sell their homes. Buyers could not get reasonable funding to buy homes. Interest rates were in the high teens now, and paying the monthly mortgage was painful. If a person had to buy, mortgage assumptions was the way to go if you had cash. LIBORS and ARMS became the new instruments that later lead to even more problems. If there was a first and second loan a WRAP mortgage was used.
The 80's were full of new lessons to be learned for those that struggling to survive. We learned of absolute auctions, negative equity, LIBORS, COFI funds, bank failures, the dissolution of the FSLIC, and the creation of the Resolution Trust Corp RTC. It was a painful time that lasted until the early 90's. Back then, no one yearned to be in real estate. A career in real estate was filled with long hours and not too much income. From the top of the market to bottom back then...real estate markets were in a malaise, and then remained flat for quite a while. The downward trend that started in the mid 80's continued for many years into the early 1990's. It was over a decade. No one back then would be so nieve to think recovery could be measured in months. It was a common understanding that real estate appreciation could be flat. It was not uncommon for many real estate companies like Merrill Lynch, Mount Vernon Real Estate fell off the face of the earth. The number of agents more than halved, when the job market improved and they could make more money elsewhere. The difference back then was that real estate had bottomed. We're not there yet.
Here are the interesting lessons I learned from times gone by.
- There was no quick fix for real estate!
- It is important to know all aspects and trends in your market.
- Appreciation may not exist.
- Property values do not always go up.
- Without buyers property values can quickly drop.
- Recovery is not measured in months.
- If you think it is bad now - wait.
- Real estate is all about fulfilling needs of buyers and sellers.
- There is no law that says "You must make a profit when selling!"
- Listing periods must be long enough to give you a chance of selling.
- Price and terms rule.
- Location is important - you may be there longer than you think.
- Quality of construction is critical - future maintenance costs must be considered.
- Buy for the long term.
- Patience is a virtue.
- Every offer is worth looking at!
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Jim not normal times indeed. I wonder if we will ever get back to them. According to Barron's this week there is another 20% drop in home prices this year before they feel things will improve.
Jim - You brought back some painful memories, and rightly so. I remember locally the only way to sell was with an Agreement of Sale, and that's because loans were assumable back then. We're really living in "interesting" times now.
Great reality check. There's alot of people out there that need it.
Your post has really put things in perspective. To me, things don't look as bad now after reading about those 15.5% rates; a qualified buyer can easily get a loan today of over 10 percentage points less.
Jim, I've lived through 18% interest rates and a market driven to the toilet by an idiot mayor. This market isn't necessarily any better or worse, it's just different, and we each need to figure out how to make it work for us.
Jim, too many expect constant "Good Times," and when we don't have them try to force them to return. The only constant I've seen during my 40 year career is CHANGE. Those who can adjust do quite well; those who can't, complain.
Jim, you have many years of experience to draw from, and it shows in your knowledge. I expecially like #9 on your list. I recently had a listing that received an offer, but the seller did not accept because she was not making money on the deal. Fortunately for her, the home is now being leased. Like Pat said, times are different, and we need to figure out how to make real estate work for us during these times.
John W Walters Slidell LA Homes for Sale Slidell Louisiana Homes (7824 Real Estate of Louisiana,LLC) I look at the stock market today and see that the market is off 50% from the peak in the DJIA. This is one of the biggest erosions of global wealth - it's epic.
Michael Mackey (R) ABR, CRS, GRI, RSPS (CENTURY 21 All Islands) I was interviewd the other day for a TV news story and when asked had I ever seen things this bad? My answer was "No, I am only 54 years old."
Stephen Graham | Buyer's Agent | Associate Broker (Realty Professionals, Inc. - Atlanta, GA Georgia) Things are much worse now with low rates beause it is all credit. Look at the FMLS statistics that were published Friday. They are calling this "not a correction but a collapse!" Their words not mine!
Patricia Kennedy (Evers & Company) The last downturn I was in the DC area and it is much more insulated than the rest of the nation. It is all government. Little or no manufacturing etc. What I am seeing this time is awful in sales stats and prices. I have my niche but I also realize it has still not shifted towards the better.
Dear Jim,
Who said that the market was normal when you needed no money, no income, and prices were through the roof! Your post is a great reality check!
Qualifying is now more like it was. You need income, credit, and some form of down payment, unless you qualify for a special program.
The pool of buyers is smaller. First time buyers have to prove that they can qualify. The move-up buyers from the crazy times may have to wait quite a few years to see an equity build-up. The pool of sellers is also smaller, if they bought or refinanced in the past few years.
There are still buyers out there who have decent income and credit. There are still sellers who have good equity. The rates are great.
This is a time when agents have to be creative and actually know something about financing and the market.
I really enjoyed your post.
Barbara
John Mulkey, Housing Guru (TheHousingGuru.com) I totally agree...the only constant is change.
John Mulkey, Housing Guru (TheHousingGuru.com) Thanks I agree. There are solutions, we all must find them.
What else can we do?! I survived the 80's but this is much worse.
Portsmouth NH Real Estate
Jim,
I have only been in the business for 8 years but I agree with everything you say, especially these two points.
Continuing to put your head in the sand is not a viable option during these times.
Hi John,
What is your take on Loan Modification. It seems that may be a solution for many left with negative equity in their homes that want to stay in home ownership
I was a mortgage officer back in the late 70's early 80's. Times were so bad then, we were unable to even offer renewal of existing mortgages. The rates for some had tripled and there wasn't a chance of the homeowner affording the increased payment required.
We're hearing up here that you have yet to reach the bottom and that it is indeed a few months away. Fortunately we're a bit more sheltered in Canada but it will get worse here too.
I really enjoyed reading this post and I hope it gets featured as many many more people need to have a head's up.
By the way, the Irish say "They haven't a notion!"
I'm sorry that you think being optomistic about my business is wrong. Because I plan to continue to thing half full and not half empty. My local market has picked up and my buyers are qualifing and getting loans. I've had 5 closings in 2009 and have two more scheduled. I have buyers currently looking. Values only fell 4.4% on average on property in my market in 2008.
No business is not what it was in 2005 and 2006 for me. But markets are local and mine is slow, but it's not in a dark abyss.
And getting "used to" bad is not something I'm willing to do.
Awesome - you are very right - to stay on top, we all have to continue to be on top of our game. Information and stats are the key and there is no fast way out of this!!! Especially with those that have the ball.
GREAT POST AS usual!!!!!
Great post. It is a fact that people who can adjust survive hard times, and those who can't don't. It is key to know your local market. The more you know the better you can meet your clients needs.
Jim,
Great post and surely it is time for a reality check. However, I don't believe the general population, and Realtors in general, fully comprehend the scope of this issue. It is a global issue and not necessarily one of a simple global recession. As you mentioned in your post, the loss of "wealth" is larger than anything we've seen since the Great Depression (and it doesn't factor in the issue that the vast majority of the US banking system is insolvent).
It really isn't a "loss of wealth" that's at work here. It is a global shifting of wealth and unfortunately for us, it is a shift away from the United States toward Asia (China being a large but not sole beneficiary), Russia, some of western europe and the middle east. For all intents and purposes, the United States is bankrupt and going to our creditors (China, India, Bahrain, Dubai, etc) is becoming less possible. Right now, the Russians and the Chinese could accomplish economically what they couldn't accomplish militarily.
Until America wakes up to the fact that global corporations (predominantly in the financial sector) have robbed us blind, we will continue to think the government can somehow "fix" this problem. Since the vast majority of Americans don't want to be "inconvenienced" by this crisis, it is unlikely the outcome will be positive. That said, I truly hope I am wrong.
Jim....excellent post. Those of us who have been around awhile understand that this is just a different time and we need to adjust to this particular time. I like what the other guy said about 'normal' amrket. When I first started hearing about all those crazy loans in early 2000 or so, no money down, no income verification it was a major red flag. We saw it coming and now we just have to deal with the way things are and be creative about helping our clients the best way possible. We are now, once again, the source of knowledge and the order takers are long gone.
Thanks for your excellent post. Anna Banana Phoenix AZ www.annabananarealty.com
This is us a good understanding of where we have been which help explain where we are going. Great list to help the many that need a dose of reality.
Jim, Just this morning, I turned down a listing based on your # 10!
It may very well sell in 3 months but I am not willing to take it for that amount of time.
Jim- I, too, think this was an excellent and timely post. It's interesting for me because I am 37 y/o and I purchased my first home in 1993 and then a different home in 1998- and I've been there since. For me it was a pretty easy experience. I heard horror stories of the 70's and 80's but I have no real knowledge of them. Now this current market is my reality. And it is my profession. One that I love. So I'm trying to be as realistic as I can when I talk to clients.
We are still seeing pockets of good activity. I listed a home Wednesday afternoon and Thursday night I had an offer. By this morning I had 4 offers. We got full price. On the flip side I've seen well priced homes sit for 496 days on market.
Jim, I think you are right on. I've only been in business for 13 years and the first ten were wonderful. Now I've been struggling and learning new ways of doing things for three years. I don't have a crystal ball so I plan to work with what is here today and try to pay attention and adjust as needed. Change happens constantly and we have to be willing to change along with it. I didn't think your blog was negative but some of the comments seemed to take it that way. Did I misunderstand?
It's happy times for people who missed out a few years ago.
Under 100K it's getting very competitive. So many homes that people email me about are under contract. It's very frustrating.
We just got a listing under contract up in Triple Crown. It was listed at $799,000.
I think the February and March numbers are going to be really good. Whether this is just the spring season pick up or the start of a better market remains to be seen.
Jim - Great, great post. Very informational for newer agents (last 10 years) who didn't experience what it was like a few decades ago.
JIm - I agree. We haven't hit bottom in the housing crisis, the financial crisis, or in our declining Gross Domestic Product. Unemployment is on the rise, there are fewer buyers and excess housing inventory with an unprecedented percentage of foreclosures. There is a crisis of confidence in the financial/banking sector, the govt.'s ability to handle the problem, and consumers are saving for 'their rainy day' instead of making purchases. It will definitely get worse before it gets better. Recovery will look more like 2001/2002 and it will take years to recover.
Jim: I've been meeting a lot of folks in my market who just don't get it either. Frustrates the hell out of me...but a good agent will always prevail. Like your list of truths.
While I agree with everything you said Jim, I really like your #14 - Buy for the long term.
That is a concept that is so foreign to today's buyers -- and I fit that category myself.
We must have gone to the same school of hard knocks, Jim. Thanks for saying what I've been thinking.
Jim, don't forget wraparound mortgages! Even I remember them - we got on from the seller on our first home purchase. Was a Godsend for us.
Although I did not have my lic. in the 80's, I was a buyer on a few occasions and my mother was my Realtor. She had been in RE from 1964 to her passing in 2006. 40 years selling before she "officially" retired. I saw our family feast or famon many times. She ALWAYS had an optimistic attitude and never waivered. She was an awesome lady and I like to think like her. There is so much negative on the news that if I carried that weight of negativism around all the time, it would be more weight than I can carry. I take the things you say as helpful hints to remember, but if everyone was negative, there would be no business.
Jim, It appears that all of us old-timers are applauding this post! Wishful thinking is not going to work this time just as it hasn't in the past. I just read Jeff's comment about wrap-around mortgages...I had forgotten about those! And, in California after a major earthquake no one could be homeowners insurance. I understand that everyone gets tired of hearing negative news, but unfortunately, that is our current reality. By the way, congratulations on the RE/MAX article!
Hi Jim~ There was and never will be a quick fix for real estate! The only thing we can really change is our attitude and how we deal with things. With all of the negative things we are seeing, there is still some positive too! For example: people are beginning to realize that they can actually WAIT for things and that some things are just wants and not actually needs! People are actually realizing that they can eliminate some things from their lifestyle in order to save money..... So, yes there are some good things that happen in bad times. The good things are just a little harder to see.
The whole Real Estate industry is going throughchanges. Realtor, Mortgage Lenders, Attorney's ect.. will have to adapt. That is my 2 cents.
Jim - you make some astute comments. So much in the media and the market is a discussion of "averages". Real estate is really local - even within a city, some neighborhoods are doing much better than others. Is it a good time to buy? It depends! It depends on an individual's circumstances and goals, and on a particular property and location. I believe most buyers aren't looking for our access to listings, they're looking for our wisdom.
Although I wasn't involved in selling real estate in the 1970's I did buy a couple of homes during those times. Yes, we had down payment money, I think about 20% and on the last home we bought in 1977 the interest was 9.75% for AAA credit rating and 20% down.
I know many who bought a year or so after us paid 13-15% interest. With interest at basement prices those who have saved and are ready to buy can get a good deal. I would bet when this market slump is over more people will realize the dream of homeownership will take more than filling out a few papers. It will take some savings and credit worthiness.
Jim,
You're right. The way we do business today is different than the way we did it 12-18 months ago. Good thoughts.
Ben Olson, Mortgages Unlimited, Maple Grove, MN 763-416-2620
Barbara Delaney (Park Place REALTORS, Inc.) I agree, and I also feel this is a good thing inthe long run!
Patricia Aulson (PRUDENTIAL VERANI REALTY - Portsmouth NH Real Estate ) I agree, but this is not the endo of the world.
Mark MacKenzie Real Estate Planning We need to be very proactive.
Mark MacKenzie Real Estate Planning Loan modification? The person that signed for the loan should be responsible for their decision. I am totally against it if it forced on the lenders, and it is subsidized by other taxpayers. Most Americans work their butts off to meet their obligations.
The sad fact is that you don't need a good market to sell - you just need a market. We were at standstill for two agonizing years. The price adjustment that we saw after the crash loosened up some buyers who had been endlessly fence sitting. Others will have no choice but to sell - where they had been hanging on for the next bull market before. Don't get me wrong...I don't like to sell people's homes under these circumstances, but it does create the inventory and buyer pool we need to actually MAKE SALES HAPPEN. The prices may not be what sellers wanted and buyers are low balling every step of the way....BUT we are at least getting some transactions done.
Susan Emo RE/MAX ( Riverview Realty Ltd - Brokerage - 1000 Islands Canada) Susan thanks for your reply. I think a lot of home owners by the way they are pricing this homes think things will be back to normal in a few months.
Tammy Lankford/Broker (Lane Realty) Lake Sinclair You should check out my Atlanta stats from a few days ago. Our MLS even called it a "Collapse!" A person can be as positive as they want, but the market will dictate which way things move. IN my market place there were less than 300 condos and town homes sold in January in 28 counties. So taking a listing is probably not a smart thing, and and will cost you hard cash marketing something that the odds say will not sell.
Connor & Paris MacIVOR (Paris911 - RE/MAX of Valencia - The 911 Team) Thanks. We need to comprehend the events around us and be able to better advise our clients.
Lisa Udy (Logan Utah Real Estate Youngblood Real Estate LLC) Exactly!
Craig Frazer (Salt Lake & Davis County Real Estate (RE/MAX Canyons) I think many American beleive there is a crisis, but have no idea how bad or how deep things really are.
Anna Banana Realty We still have too many oreder takers still around. I am glad this is over.
Hi Jim,
I couldn't agree with you more... It's gonna get real bad !!!! We are kidding ourselves if we think these banks aren't insolvent. Oh for all those positive people our government is insolvent to! Wake up America its time to call a crook a crook.
Hummm Sub-Prime SIVA, SISA, NINA, were Realtor's telling their clients these loan were bad or did they just grab their commission check and run? How many Realtor's that placed clients in homes with bad mortgages are trying to help these very clients avoid foreclosure? Most Realtor's here in California refuse to deal with short sales even though they are a large part of the market share.
What frustrates me is the lack of desire to learn whats really happening with the credit markets, the ecomony and distressed properties. Its great to be positive about your business, however if your not educating yourself about market conditions, the foreclosure process and the credit crisis your being positive wont educate the buyers who can qualify to purchase a home.
I agree with your statements and after all, can anyone define "normal"? In the early 70's my husband & I "hadn't a clue" that the market and economy was tough. In 1980 we paid 16% on a first TD. We invested in property throughout those times. In 1990 I got my real estate license and didn't make a cent the first year! All in all though, real estate has been very good to us and I believe in the product especially with the caveats you listed.
There's no doubt that we have a responsilbility to provide sound and rational counsel to our clients as well as not proffering doomsday attutudes to exacerbate the market.
Hi Jim,
I couldn't agree with you more... It's gonna get real bad !!!! We are kidding ourselves if we think these banks aren't insolvent. Oh for all those positive people our government is insolvent to! Wake up America its time to call a crook a crook.
Hummm Sub-Prime SIVA, SISA, NINA, were Realtor's telling their clients these loan were bad or did they just grab their commission check and run? How many Realtor's that placed clients in homes with bad mortgages are trying to help these very clients avoid foreclosure? Most Realtor's here in California refuse to deal with short sales even though they are a large part of the market share.
What frustrates me is the lack of desire to learn whats really happening with the credit markets, the ecomony and distressed properties. Its great to be positive about your business, however if your not educating yourself about market conditions, the foreclosure process and the credit crisis your being positive wont educate the buyers who can qualify to purchase a home.
We , like you , have been around a long time -- and remember the days of the 20+ % loans ---- the market will continue to change and we have to just work with it and make what exists work. Our 2 cents.
Jim, very in depth post and congrats on the feature. But I am busier with new loans (purchase and refis) than ever to start a year.
I dont claim to be blind to the reality, but I do believe there is business still out there for those willing to change and hustle, in real estate and in the mortgage industry.
Let's both hope that something crops up to help out!
Every offer is worth looking at...its funny how some sellers till get offended at offers that really are that low.
You had a great set of lessons. It is embarrassing that we have ended up in the situation as a nation. What ever made us think that you could get rich with nothing!
Jim, You poured everything you had into this post. I remember the interest rates at 15.875% in the 80's.......when I moved to Missouri and had no interest in renting. I had to buy and found a great home, even though the interest was bad.
Jim - that is a great 16 point list and some great lessons of experience that are being shared. Great post !
On a side note, I saw your quote in the most recent Realtor magazine ! Congrats : ) That was a very informative article.
Jim,
Great post from a real estate veteran! In the 80's and 90's I was working in a totally different industry. When I arrived to real estate, it seemed that "up" was the only way things could go. So many of the loan products seemed suspect. Hey...I never could have borrowed for my previous business under such crazy terms!! But the gurus all kept saying that somehow we could bring this out of control rocket ship to a smooth landing. Yeah right. Houston...we have a problem.
So now I'm making sure my safety harness is on tight. Looks like this could get even rougher. Swell...
Love the list.
Jim ,
Reality is not for everyone. It is only for other people.
I left a comment on my blog for you with a atlanta link and it when to ar spam? It shows in comment count but puff. If it dosen't turn up I will do it again'
Best.
Richard
Back to reality! I am just thankful that I have a closing this week.
Kristina Yorke (www.LowestHomeLoanRatesinFL.com ~ FL FHA Mortgage Expert ) I am glad you enjoyed.
Margaret Rome- Baltimore, Md.-HomeRome.com (TREC-Sell Your Home With Margaret Rome) The downside of a long listing period is that it is very easy to get on each others nerves.
Debi Braulik (Federal Way to Tacoma, WA) (Keller Williams Realty) The realities are different for different price ranges and locaitons. We must learn what is hot, and what is not! That is where the stats come in.
It's tough, that's for sure but we'll survive and be better for it. Jim, I agree, the market will and does dictate, no matter how positive but I do think a little more optimism can go a long way for making people start to feel that there is hope. I know there are success stories out there, all over the country and it would just be nice to hear a few of them on the media from time to time. It might very well get worse before it gets better, the market took another hit today and has now lost 11 1/2 years worth of gains. Confidence is what has to make a comeback. I've taken an enormous hit personally but I am going to get up each and every day and be thankful for the day and the opportunity to pursue my passion which is real estate.
Eunice Waller, Your Fredericksburg VA Hometown Realtor (Prudential Simpson & Assoc.) You are so right. Low rates, high rates, flat market, manic...change is the only certainty.
Marian Goetzinger Crystal Coast Real Estate NC (Pine Knoll Shores Realty 252-422-9000) No, I think you got it. For survivors it is always adapting to the our new surroundings. Different price ranges, first time buyers, and perhaps Adult 55+ communities...may open a whole new business.
Well written as usual, Jim. There's always someone with a quick answer. Why is it that in these slow times, we keep getting bombarded with quick fix solutions? Lead generation companies... online solutions ... marketing tricks... People think they can buy or hope their way out of this one. Not true! It still depends on good old fashioned hard work and getting OUT THERE in front of people.
I too lived through those 80's. I got my license in 1979 and started in real estate. I never saw an easy day in the business. It was "creative financing" most of the time. There were also lots of FHA and VA and Bond assumable loans. One agent that I know bought lots of them when people had to move. She's wealthy now!
Tim Maitski "Secret Agent Guy" (HomeAtlanta.com) The lower prices have brought out the 'vultures' in our business. I believe Atlanta is about to shift from sub-prime to Alt-A woes. The upper end is building some incredible inventory levels.
Kim Daugherty, McKinney TX REALTOR, Broker (d + b real estate) Stay tuned and you will beable to share stories of your own! There will be a lot to learn in this coming market.
George Bennett, Broker, GRI, ABR (Neath The Wind Realty) You brought up a very good point confidence. Politicians need to stop talking down the economy for political gain! In the past this was always forbidden! We have self serving politicos in Washington DC these days.
Chris Ann Cleland, GRI (Long & Foster) We must stick to the facts that surround us every day. Recent solds, and comps! We can always determine what is driving the market.
Chris Olsen Broker/Owner - Olsen Ziegler Realty (Olsen Ziegler Realty) Years ago everyone tried to purchase for the long term. People need to get back into that. It is their investment. A sound home in a good neighborhood with a great location will always be in demand. Buyers must buy with future resale in mind also.
Jim,
So true, these challenges in the market and our economy are deeply rooted. We are certainly contending with very "different" times and we have a responsibility as real estate professionals to acquire as much knowledge about the market climate as possible so we can advise our clients to make educated and calculated decisions. Thank you for this important post.
Margaret Woda, Maryland Real Estate (Long and Foster REALTORS, Crofton Office) Margaret, back in the 1980's I was living in Maryland when the State Savings and Loans Started to fail. I went to the bank one day to get a check for our mortgage and found the bank closed. It was a State Insured Savings and Loan. It was guaranteed like the FDIC under FSLIC. People do not remember but you could not withdraw funds and when you were able to...there was a limit. This was a time where S&Ls started to fail all across the nation.
What is scarier today is that it isn't the small banks failing, it is the big national banks. Yes they are failing even if they are doing business under another name. Mergers and shotgun weddings and TARP funds are trying to hide this from our view. The scary thing is this is just starting.
Jeff Geoghan MBA - Lancaster PA Real Estate Expert (The Jeff Geoghan Realty Group, Coldwell Banker Lancaster PA) No one could forget WRAPS,but today with negative equity and the way mortages are written there is no way to assume.
Marty Kampmeier (Prudential First Realty) Thank you for sharing. I think many persons confuse negativity with facts. They shouldn't.
Lake Norman Real Estate ~ Diane Aurit (RE/MAX at the Lake) Diane there is always a lot of change in our business. I also felt that after September 11, 2001 that nothing would ever sell. The stock market plunged, no planes were in the sky, and companies folded left and right. We had deals ready to close that totally fell apart, and yet things got back on track quickly. This is not one of those times.
Owensboro KY Real Estate Specialist Vickie McCartney Broker,ASP,ABR (Home Realty GMAC Real Estate Owensboro Kentucky) Good times are a head. You mentioned one thing I totally believe in. Good things are worth waiting for. I believe demand is building behind the scenes, and persons are now planning what they will purchase and where they will purchase.
TONY ANDERSON Realtor® Habersham White Stephens Hall and Banks (Century 21 Community Realty In Northeast Georgia) No one is immune from this.
Sharon Simms St Pete FL - CRS CIPS CLHMS RSPS (ALVA International, Inc.) Sharon, I so totally agree with you! Wisdom and experience will be a sought after commodity in the near future.
Wow get use to it and unrealistic. While I will agree that politicans are not the answer you miss one point. The public is screaming for an answer, unlike the Carter days that we all went through. The public didnt yell and scream so now we have the politicans attempting to force things anf make "things right" by reducing what they owe and capping payments. As I wrote today and you called me unrealistic there are other ways since the politicans feel compelled to do SOMETHING. But then we cant all wait for things to be normal and back to the stone ages
Gail Tassey**South Austin Real Estate Austin Texas **512-217-9482 (Sky Realty Austin) You brought up a great point. Years ago the closing took a long time because all the information for a loan was actually verified. Employment, saving accounts, seasoned funds in accounts.
Ben Olson Minnesota Mortgage Specialist (Mortgages Unlimited) It will all change again soon. Do not get too comfortable! LOL!
Ruthmarie Hicks (Keller Williams Realty) And that is why it is called a "Buyers market!"
# 55 Very well said!
Lynn Kenton Ventura Real Estate (Ventura Property Shoppe) I agree.
Bob & Carolin Benjamin - E Phoenix Arizona Real Estate (Benjamin Realty LLC) Thank you for your comments.
Craig Andriulli - Sr Mortgage Banker (Bergen County - Secure Lending Solutions) I am hoping some positives things will occur, but I am also now numbed that each one of the stimuls interventions have failed to increase any bsusiness activity. Instead there are fewer calls and leads.
Chuck Carstensen (Re/max Associates Plus/The Discovery Coach) Sellers need to get with the program...it is now running re-runs.
Lise Howe, Realtor and Attorney Licensed in DC, MD and VA (WC&AN Miller, a Long and Foster Co. ) Thanks. In the years preceeding the 'Great Depression' the standard down payment was 50% down. So what made anyone think that 0% down could work wihtout risk?
Kay Van Kampen, Broker, Springfield Missouri Real Estate (RE/MAX Solutions) Kay you reminded me there was another correlation all the time. For all of those waiting for prices to come down, they may also have to pay higher interest rates.
Christopher and Stephanie Somers - Realtors - Philadelphia Real Estate (RE/MAX Affiliates) Thanks! I did not know I was in Realtor Mag.
Hal Benz at Weichert, Realtors If we think back...first they said no problem with sub-prime...then they said no real estate bubble, then they said "soft landing." So here we are a year later now who do you believe?
Richard Stabile Bergen County New Homes Builder Realtor (REMAX real estate associates) Thanks Richard.
Linda Pitts (Prudential Ann Prewitt Realty) You are blessed!
Donna Yates, Georgia Realtor North Georgia Homes, Blue Ridge Mountain (Coldwell Banker High Country Realty) Markets always comes back but it is also good to research what happened in other down markets?
It is what it is. That is all. It isn't what we want it to be... it is what it is. Wishing and ignoring won't make it go away... it is what it is.
Erica Ramus, CDPE / Realty Executives / 570-622-6006 x301 I have recieved so many inquiries for persons trying to sell me listing leads! Excuse me?
Barbara S. Duncan ABR, CRS, GRI, e-PRO Searcy AR (RE/MAX Advantage) There will always be those that know how to make agood living from today's woes.
Seraina Aguayo, Realtor/Broker, GRI (Palazzo Realty Group, INC) I'm glad you enjoyed.
Jim,
I love to read a post that is grounded in reality and not wishful thinking. I guess wishful thinking has it's place...I'm just not sure where.
Thank you,
Joe Adams (Major Mortgage USA/Branch Manager) I don't think there was any outcry against the politicians. They got the blank check book and are writing checks all over town with our names on them.
Lane Bailey - REALTOR & Car Guy (Diamond Dwellings Realty) You're right, "It is what it is!"
Fran Gatti - Realtor® Crescent City CA Real Estate (RE/MAX Coastal Redwoods) Wishful thinking is always a good thing. I think we have lived though many years of it.
Jim, this post is exactly what I've been feeling for the last 12 months. I felt it, but I've been too afraid to say it because I feel like too many people would rather pretend they were sliding down rainbows and eating cotton candy clouds.
This is bad. Really bad... and I don't think we've seen anything yet.
I'd love to make money, and easy money at that, but I don't want to see us go down the same path again. I'm willing to stick it out and adapt through the turbulance.
Thanks for injecting AR with a dose of reality!!!
In our market the lower priced homes and foreclosures are selling and the expensive lake property where they tear down the mansion to build a bigger one. There is no quick fix to this mess and yes it could get worse.
In our market the lower priced homes and foreclosures are selling and the expensive lake property where they tear down the mansion to build a bigger one. There is no quick fix to this mess and yes it could get worse.
Very informative and insightful - I don't quite yet have that kind of wisdom to share and I appreciate your sharing of it! I think hard work and smart thinking will always conquer the rest of it - congrats on the feature!
Julie Ferenzi (RE/MAX Professionals South) I looked at he stock market today...we are in a "Bear Market" X 2. A bear market is defined as a 20% drop in the average and this current market correction is lterally 2.5 times higher. We are in a 50% drop in the DJIA in realitivly a short time. This is an incredible erosion of wealth. The impact of this loss has not even filtered through the economy yet. There is no nice way to say this, but retirement funds have been slashed in two and most of our population will be retiring soon. Baby Boomers are now approaching the time they would be retiring. So.. with this one group the most common phrase will be "Not so fast there!"
We have to sit back and ask, how will this impact them? Will they stay put? Will they refurbish thier home instead of moving elsewhere to retire? Will they retire? Will they postpone retirement? How Long? How will impact the price of what they will buy? Since many states may have tax issues, and homestead issues there will be many other factors to consider.... it most certainly will have an impact on our business also.
Kathleen Lordbock Brainerd Lakes Realtor/Staging Specialist ( Keller Williams & Re$ale Design) In the late 1980's in Northern VA I saw loads of commercial buildings being built. All of them were vacant, yet they kept building more. Everyone assumed the banks knew what they were doing. Guess what? They didn't. Keep in mind that now many of the big banks are basically being run by the FED. If you think the banks were bad...
Emily Lowe - Nashville, TN Realtor (The Lipman Group / Sotheby's International Realty) Thanks! Anyone can do it. All we have to do in real estate is survive, make a profit, and not get too comfortable.
Jim... what an excellent post at the right time. Wishful thinking.... hey, I consider myself a positive person, but I also prefer reality. ANd in recent months, I have been criticized by some loan officers that I am rough around the edges and harsh on other loan officers, that I seem negative. I find it funny, because I don't want to be known as the 'fluff' loan officer, or one that tells you what you want to hear, just because it sounds good and because we need to keep spirits high. Yes, I believe in high spirits, but as mentioned, I believe in the truth and reality. You just can't always have both, you can't, especially in this economy.
Overall, this was perfect timing, because I am getting tired of the those 'fluff' posts that get featured, that make us all warm inside. We need to educate each other more than ever before... we need to be on top of our game, and lastly... if we think this could take years, we need to talk about it... we need to explain why we think so, and give our honest view points. And take that in a positive twist per se, to get us all through this. That's my goal for 2009, not the 'fluff' boy. nice job here. As you can see, you hit a nerve and pet peeve.
Those that don't deal with the reality will not be hear next year. Good post....It is not negative, but just a reality to do what you need to do to survive and get back to basics and cut out the garbage that is not working........
Jim - its sad but true....Not the way I WANT to get business. But after two years of stalemate - its a relief to have things move - even if slowly.
Well I guess you told them...and they are not likely to recognize themselves, but we all are ahead of the game for our clients by not living in denial. They expect reality, we need to give it to them.
Well I guess you told them...and they are not likely to recognize themselves, but we all are ahead of the game for our clients by not living in denial. They expect reality, we need to give it to them.
As in anything, reality too should be taken in moderation. It is wonderful to hear the truth be told, let us not overwhelm the public with doom and gloom. we should discuss intelligently the issues and create solutions that work for our industries and current business models without sounding negative and hopeless. God bless you . with all your experience comes wisdom and the ability to believe that this too shall pass. maybe not today or tomorrow, but soon enough my friend. there is one thing that is certain in this life and that is change , be it good or bad. the thing that matters most is how you choose to handle it and the meaning you give it for your business and your life.
Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans (Infinity Home Mortgage Company, Inc) I love your response. I have received emails and some comments that try to tear me up for coming across negatively. I am not raining on anyone's parade, I share observations and a perspective. If a person does not like what I share, show me where I am wrong. Write your own blog, substantiate your sentiments. Just do not attack me for my opinions which are based upon data.
I am seeing loads of real estate offices closing in the Atlanta area, and loads of agents flocking to companies where they can hang thier license cheaply while they work a full time job if they can find one. I cannot drink the Kool Aid and break out into the chorus of "Happy Days are Here Again!"
Tim Moncrief, Co-Owner-Bartlett RE Group (Keller Williams Realty ) Thank you for sharing.
Ruthmarie Hicks (Keller Williams Realty) Business will be back...but even slow business is good.
Terrylynn Fisher, Diablo Realty, Walnut Creek, California Most new listings I am seeing come on hte market in Atlanta are still way overpriced inspite of no sales!
Jim,
I love #16. You are right every offer is worth looking at! Great post.
Benita Gottfried (New Vision Interiors LLC) It will all pass, but we have to get through this rough patch first!
Dorie Dillard: Canyon Creek & NW Austin Living (Coldwell Banker United) Thanks! Years ago in a very bad market I had to sell my own home. I pricedit bare bones at $255K, nad reduced it to 245K. On St Patricks Day I received and offer of 215K. I countered it and sold it for 240K. At closing, I asked the buyer why he came in so low, he said he thought he would try it.
Dorie Dillard: Canyon Creek & NW Austin Living (Coldwell Banker United) Thanks! Years ago in a very bad market I had to sell my own home. I pricedit bare bones at $255K, nad reduced it to 245K. On St Patricks Day I received and offer of 215K. I countered it and sold it for 240K. At closing, I asked the buyer why he came in so low, he said he thought he would try it.
Jim - You have such a gift for the pen. I love reading your posts. During the 70s and 80s I was in school but I knew the market well since I grew up in a real estate investor houshold. My parents had over 30 properties and I was always crawling through windows to get the door opened when the tenant moved out in the middle of the night and didn't pay the rent. My parents at the time went through lots of stress keeping the houses they had and I remember my father telling me that it was the time to buy as many as possible because it can't stay down forever. Fast forward to today. I don't have the funds to purchase anything but I know this is the time for those who do have the means to buy, lease and wait for the turn around.... no matter how long it takes. I just need to find them and help them to achieve their goals and by doing so, I will be able to achieve mine.
David Slavin, ABR, SRES RE/MAX Grand, Katy, TX (RE/MAX Grand) David what a great story to share, and you are so right. You can be of great service to those looking for direction and advice.
Jim thank you for such a great post. You do have a gift of the pen or should I say keyboard.
My husband and I have bought and sold our primary residence 8 times and had one property we rented in CA. in the last 15 years. That is how I got into Real Estate. We were transferred with my husband's company each time. Our last move was from Northern California back to Texas 3 years ago. What a huge blessing. We could not stomach purchasing in CA and putting all of our savings into a speculative market. We just kept saying it can't keep going up like this. That was a smart decision. Our plan now is to stay put, be thankful for our 30 year fixed 5 1/2% interest rate on a home we can afford.
The days of putting a listing on MLS and a sign in the yard are gone. Now is the time to get educated on new marketing technology, be realistic and work hard doing #8 Real estate is all about fulfilling needs of buyers and sellers.
Thanks for the reality check!!
Thanks for the reality check Jim, I don't think I'm a perfect Ten 16 on your list but I'm in the ball park. Thanks again...
Jim,
Must read for everybody in the real estate and mortgage business. When buyers stay on the sidelines, there is very little, or no, market. Lack of demand today is the biggest obstacle to any turnaround.
Primo advice, Jim. You bring back memories. I was a new agent in the 70's and cut my teeth on FHA & VA buyers in Indpls. Then it was getting excited about listing a home that had an actual 'Assumable' mortgage! That meant a saleable listing.
So with the questionable liquidity of the banks, what is your opinion? Put our money in a mattress?
Hi Jim,
I made comment #55. I didn't realize I was not logged in when I commented. Thanks again for your great post I look forward to your next one.
Alice Linahan (Keller Williams) Ellen and I sold our own home about a year and a half ago...it was just too big for us. We are content right now staying put in much smaller quarters until I can feel bottom. We are headed back to whatever normal will be after the dust settles. We count our blessings every day!
Paul Henderson, Realtor ® Lacey & Dupont Washington homes (RE/MAX Professionals & Four Seasons Inc.) Thanks again! Yes I agree. All offers...are worth a look!
Esko Kiuru - Las Vegas NV Mortgage Consultant (Sinifox Financial) I totally agree...on the radio today in Atlanta the "Clark Howard Show" was talking about how much cash is parked on the sidelines. It is enormous, and yet those that have it parked... are parking it for free, they just want safety. There will come a time where the money comes off the shelves again and into real estate. We are not there yet.
Joan Snodgrass Tri-Lakes Realtors, Shell Knob, MO (Tri- Lakes REALTORS) Right now I personally fee that 'T Bills' is the only safe investment (I would not do long term, 6 months to 1 year). CD could be risky if we had a major run on the banks, and municiple bonds could also be at risk as we are seeing fiscal trouble in big states and cities.
Gary Ricco Realtor Certified Distressed Property Expert. (Keller Williams VIP Properties) Gary I realized that later, but did not know how to respond. I want to thank you for your comments.
Jim - I thought about this blog last night as I listened to the "speech" and watched Pelosi act like a Jack-In-The-Box!!!
Kathy Carson - The Gary Foster Team - RE/MAX 1st Olympic
Kathy Carson Lynchburg, VA, REALTOR VA HOMES - LYNCHBURG, BEDFORD, CAMPBELL (RE/MAX 1st Olympic, ABR, GRI) You are braver than I am. I could not bring myself to turn it on.
Kathy Carson Lynchburg, VA, REALTOR VA HOMES - LYNCHBURG, BEDFORD, CAMPBELL (RE/MAX 1st Olympic, ABR, GRI) You are braver than I am. I could not bring myself to turn it on.
Jim,
I went through those years as well. I remember many homes sold on land contracts. It may just be that we can not sustain affordable housing for everyone. Frankly, I don't think there is anything in the constitution that guarantees everyone their own home.
Regarding the Real Estate Market, my view is that you are right that many Realtors, and other Real Estate professionals, for that matter, haven't yet got it. Things will be different. Adapt or sink, seems to be where we are heading.
Walt Fish (Bay Area Home Inspection, LLC) I share your sentiments, and reality has away of presenting us with those unavoidable moments in life. Sooner or later it all has to sink in.