It's that time of year again in good ole Minnesota. The snow is about to fly, the holidays are right around the corner, and the yearly 'How to get listings in winter' seminar is coming up. It's a topic that has been up for debate in my office over the last couple of weeks. Is it really a good time for sellers to sell?
The owners of the company have sent out a list of reasons why now is a great time to sell. They point the lack of inventory due to people coming off of the market. 'Buyer's looking now are really serious.' The list
goes on and on. But when we look at the statistics, don't they tell us otherwise? In the statistics we receive from the Minnesota Association on Realtors, it shows that the 2 month period of November and December are the slowest two month period of the year. Every year!
So is this a disservice to our potential clients or is there any validity to the idea that now is the time? I believe the numbers don't lie. This is a time when people are settling down and preparing for time with family. You want to go on the market in January, that's just fine. The numbers do improve.
I recently read a blog about how to respond when someone asks you who set the price. It was presented in a manner that the person asking this questions was getting a feel for the sellers and if the price was firm or soft.
It made me think a little more about the question and how I approach listings. Do I set the price or do the sellers? My answer to that is always the sellers. This has been a topic of debate many times in my office. Some agents take the approach that, "I'm the expert, so of course I set the price". The problem is that one you set the price, you have taken ownership of that price. and guess what happen if the home doesn't sell at the price you've determined? That's right; you become public enemy number one and your credibility is shot.
In this volatile market, it's important to remember that, while we are the experts and should have a better handle on the market than most sellers, even we experts can be off the mark from time to time. That's why we need to take the approach of providing information and suggestions. We show them the data, we give them our opinion, and then we let them decide. Then they have taken ownership and if/when it comes time to ask for that price reduction, it's easier to say, "We've tried it at your price (ownership) and we haven't sold. It's time for a price change (not reduction; there's power in wording as well)".
I enjoy watching all of the interesting posts that come through this website. There's never a shortage of great insight and advice. But it seems that lately there have been a lot of posts regarding this upcoming mortgage defaults. They are all predicting another depression in home prices and a major uptick in inventory.
I saw hog wash. When we fell into the mess we are in now, that banks and prognosticators had their heads in the sand and refused to addres the issue until things got to where they are now. Everyone is well aware of the large amount of ALT-A loans coming due. So are the banks. But let's say, just for kicks, that nothing is done. Do people really think the banks will simply flood the market with foreclosed homes?
Things are moving in the right direction and you can believe the banks will do everything in their power to make sure this continues. Statistics from the Southern Twin Cities Associaion of Realtors recently sent out updated stats in the Minnesota Metro area. As of September 2009, the absorption rate is down to 6.6 months. This is down from 9.9 months this time last year. And us Realtors are seeing it in the market. There's les to look at. Our listings are starting to sell. Especially the non-foreclosure homes.
Along with a number of other economic indicators that I won't get into, this country is making large strides to pull out of this recession. So put your mind at ease. Quit scaring your friends and clients. Now is the best time to take advantage of a down market. If people are going to wait for this next wave to come, they will be in for a big surprise when it doesn't happen and they miss the boat!
I do a majority of my business in Inver Grove Heights, Minnesota. It's a moderately sized city just outside of the Twin Cities. I would characterize the area as one that may not have been as greatly affected by foreclosures as some. More middle of the road.
Now there's been a lot of rumblings in the industry about a new wave of ARM's and ALT-A loans coming due this fall and that we may want to be prepared for another hit to our housing prices. I've also heard that banks are now holding onto their inventory in an effort to decrease supply and ultimately raise prices.
I will say that I have seen a decrease in inventory in our area over the last three to four months. I've also seen increased activity in non-forelcosure home sales, which is what I specialize in (sounds funny that I now have to 'specialize' in this area). But I'm undecided as to which story I want to believe. I would say I lean towards the banks holding inventory since I've seen the evidence. And if this were true, why would there be a flood of homes come this fall?
As usual, it seems that there are plenty of 'Doom-and-Gloom' stories for everyone. I tend to want to believe in the stories that encourage progress and improvement. But maybe that's just the old bleeding heart social worker in me. And this is why I turn to you. I am interested in hearing others take on this issue. What have you heard? What do you believe? The floor is yours . . .
In an effort to be on top of my continuing education requirements, I thought I would try and take some classes that may have some residual value. I started out last year as just a plain old Realtor. Now half-way into 2009, I am now an E-pro and well as a designated ABR member. Next step, CRS? GRI? CDPE?
I realize now that these designations, while exposing you to some great ideas, don't seem to hold much value outside of any other class. We plaster these designations all over our marketing. In fact, we're encouraged at the classes to do so, being told this will increase our production by 10, 20, 30 percent. But who on earth has any clue what these mean? How many Realtors know what some of these designations mean? My experience has been that no one outside of the real estate business knows their meaning and 3/4 of those in the business understand them.
So why take them? I suppose there's a feeling of accomplishment when your business card is plum full of designations. Maybe they portray an image of professionalism. Ultimately, when the day ends, they're just a jumble of letters. You take the class, you pay the class fees, and sometimes you pass a laughable test. The upside is that they can't take those designations away from you.... unless you stop paying the dues! :)
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I assist buyers and sellers with all of their real estate needs in Inver Grove Heights and the surrounding areas.
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