Why is the market so challenging for Realtors these days?Well for starters, there are just less people buying real estate today then in the height of the market. That's pretty obvious.
There are other factors as well. Fear of falling prices is certainly one of them. Also, I recently saw a blurb that people buying homes with a mortgage has fallen to some of the lowest levels ever recorded.
That basically means that most of the homes being bought today are done so with all cash. In fact, the new stat is that last month, 26% of homebuyers paid all cash for their property.
Probably, and more significantly, is the fact that people who are selling via a short sale are not buying after they sell, but rather renting. With no proceeds from the sale and their inability to get a mortage, because of their negativley effected credit report, they simply cannot re-enter the real estate market as buyers.
Also, take away those with poor credit, little or no savings and low income, (subprime borrowers) and you have a very small pool of buyers, to say the least. With such a large segment of the potential buying population erased from the equation, the real estate market is indeed suffering.
There are several other challenging aspects in todays market, including the competition to buy foreclosures and the process of buying/selling via short sale. Both of which are uncertain propositions.
A new hurdle, if you will, are those buyers who are racing to beat the April 30th deadine for the $8,000 government tax credit. It's going to be hard to get banks to approve new short sale contracts in less than 45 days. As I see it right now, only non short seller and approved shorts sales will make the cut.
One thing I have noticed, a bright spot if you will, is the stabalization of prices, not to mention a increase in the value of real estate.
Case in point, I had a customer who was interested in buying an upgraded townhome for 25k. He did not act and now, six months later, that property is selling for around 80k - 90k.
One more example, I have a buyer who is buying a property for 315k. That's about what the house was selling for around a year ago, minus the cost for impovements. The property's location and condition are driving the sale and purchase price.
Yes times are tough, but there does seem to be a light at the end of the tunnel. I know the numbers are down, but nothing stays the same forever, and time does indeed pass. It still may be a while, but Realtors who've been around know that, eventually, the market will stabalize and even rebound. How long that will take is anyone's guess.
Besides, as RUSH legend Neil Peart would say, "It's not as if this barricade blocks the only road."
Thanks For Reading!
Aaron Glassman, Lic. Real Estate Broker
A-1 REALTY GROUP, INC
www.A1RG.net***Image found while doing a Google search for hurdle pictures. Funny how it was used for another real estate article on the "Hurdles of Home Buying" found at this link: http://images.google.com/imgres?imgurl=http://www.lakesregionrealestatenews.com/wp-content/uploads/2009/11/hurdles.jpg&imgrefurl=http://blog.lakesregionhome.com/2009/11/12/home-buying-hurdles/&usg=__mP2by7TfNk8rKuOmOSy7V6eQsM8=&h=346&w=346&sz=76&hl=en&start=34&um=1&itbs=1&tbnid=Gy3q2vyocjl-ZM:&tbnh=120&tbnw=120&prev=/images%3Fq%3Dhurdles%2Bpictures%26start%3D18%26um%3D1%26hl%3Den%26sa%3DN%26ndsp%3D18%26tbs%3Disch:1
Check it out!
