Judy Savage

Last week I took the office of President of our local Board of Realtors here in Charlottesville. My speech was all about agents getting "real" about the market. Our area isn't nearly as bad as many places across the country. We are home to the University of Virginia which is expanding and really keeps our economy running here. However, our folks watch the national news and if you listen to any national news program you would think we are in the worst market since the Great Depression. NOT! Real estate is all local and there really isn't any reason that our market shouldn't still be thriving but people are scared to buy because they watch programs like the Today show with that Kramer guy screaming not to buy a house. Bottom line in Charlottesville is that we have too much inventory. Too few buyers and more house on the market than in a long time for longer times means prices are falling. Some people haven't gotten it that their homes aren't worth what they were 18 months ago and it's our job to educate them. We need to be honest and tell them the truth and show them the numbers. If they can't accept what their home is really worth, they should take it off the market. We need an old fashion inventory reduction sale. I am telling folks if they can't handle the "new" price of their home they shouldn't put it on the market. As a REMAX agent I pay for my own advertising and in tough times I don't want to waste my money and time advertising property that isn't going to sell. If every agent had to pay for their own ads they wouldn't be so eager to list over priced property. Am I being too tough, maybe. But, I am speaking the truth. Price your house right or take it off the market! So, that is what we tell the Sellers but what about these buyers that are waiting on the side lines to buy until we hit bottom. Well, by the time the press is reporting that the market is improving we will already be on the way up. Actually, now is a great time to buy. There is a lot of selection and rates on conforming loans are under 6%. There is no pressure like there was in 2005 when you might have had five homes to choose from and if you didn't decide today, it wouldn't be there tomorrow. Plus, back then you might even have paid more than full price. Today, Sellers are more willing to negotiate and many are offering incentives to help with closing costs. Historically homes usually increase in value almost 100% every ten years. That's pretty good when you consider that most people only invest a much smaller amount that the entire purchase price. In l993, fresh out of a divorce and a single parent, I bought my first home by myself. I got one of the community reinvestment loans offer by a loan bank with only 5% and no PMI. That came to about $7,200. I lived and loved that home for six years. When I sold it I had $72,000 of equity. Since then that original $7200 has grown to over $350,000 (even in today's market) Where else could I have invested $7200 15 years ago and ended up with over $350K? So, if you have some cash lying around call me or call the Realtor of your choice and go buy a house, now! Real estate is a long term investment, this isn't a flipping market anymore. Be prepared to hold on to your house for awhile and sit back and watch your money grow. Yes, we Realtors have a delicate tight rope to walk. We must educate our Sellers to get real with their prices and offer their properties at a realistic price. At the same time we must convince all those buyers on the side lines that it really is a good time to buy and that buying a home is a good investment. It almost sounds like we are talking out of both sides of our mouth. But, what is is. The market has changed and that IS a fact. Hopefully before long we will be back to a "balanced" market and that is something many in this business haven't experienced. I've been doing this 22 years and it's never easy to disappoint a Seller by telling him or her that their expectations of their home can't be met. But, it is better to let them down now than six months from. Do they want to list their property or do they want to sell. That has to be the question. Gotta go, I need to go get some price reductions.