Field of Dreams.....Ignore The Voices

Remember those whispers that plagued Kevin Costner's character, Ray Kinsella, in the movie Field of Dreams...."If you build it...they will come"; softly muted, carried on the wind through rustling corn stalks? They made him wonder if he was crazy until he decided to do what the stinking voices told him to do.

I wonder how many of us heard those same voices prior to this market decline? "Buy it and the money will come". I know many in the real estate industry did, and certainly Home Builders heard their own version: "If you build it, they will buy!".

Year to Date Sales of Single Family residences in my market are down 45%over the same time period in 2008 and over 63% for the same period in 2007. That's alot of sales not happening for agents who grew lazy and relied on referrals falling into their laps. A large difference in the number of these sales can be attributed to the decline in New Construction....tighter wallets for the builders too.

Many home builders across the country have slashed prices, altered inventory and been forced to sit back as their projects have been commandeered by their banks; no longer allowed to call the shots on their own sales. Many platted, mostly undeveloped projects have become all but ghost towns.

The downturn in New Construction across the country (which according to one source is at a 50 year low)is hitting Washington State especially hard with the decline in timber sales. Money from timber revenue funds hospitals, parks and schools among other locally assessed projects.

We are all witnessing the impact real estate has on the economic health of our country, and new construction is what typically drives the real estate market. For now foreclosures and investors are in that seat. But as with any free market system it will eventually correct and Builders will once again take center stage.

The lesson learned has been a hard one.

Those voices may have saved Ray Kinsella's farm from foreclosure, but that was 20 years ago. Who knows....maybe today his grandstand would be as empty as many of the new construction developments I drive by daily.

One thing's for sure though, when this market does correct, most of us will need to exercise a little spending caution and tell those voices to just shut up!!