Gregory Bain

Yeah, that's right. This is the "NORMAL" Housing Market that you have been waiting on to return. I know this because the appraisal says it. Well, OK. Maybe it doesn't say that exactly but if you read the report you would think it is a pretty good market to sell a house. I remember talking to the appraiser before he went out to the townhouse and I asked how I could help with comps and what our current market was like. He seemed so nice on the telephone.

Yes, he says prices are still declining. But, the inventory is stable (?) and the number of distressed sales are not significant for my area (Really?). Who am I to argue with an expert. I mean after all he does have all the data from the Monmouth County MLS to back up his numbers. And, he found two recent (within a year) of similar homes that sold at a Fair Market Value (FMV). One sold for the new benchmark and the other for $5000 more.

And, yeah. I know you can't use other distressed properties in an appraisal. That's why when he couldn't find any other comparables in that housing community he had to look 2 miles down the street and use a single family detached home to help his averages for the home in the multi-family community (aka - attached dwelling). I fully understand. Why would anyone expect the appraiser to use other townhouses in another multi-family community of attached dwellings that lies a mile away?

What? You say Ocean County has its own MLS and that not all listing and sales in my area get posted in the Monmouth County MLS. Well, still, the apprasier must have enough data in that MLS to come up with his number. Heck, he even gave a discount of $7000 on my listing for necessary repairs of paint and some carpet (not all the carpet) because he did his due diligence and called the other agents to find out that those houses were in pristine condition.

Still, I got the $7000 off the FMV. And, using Federal Housing Administration (FHA) rules we can bring that amount down to a lower net. Wait! No, I didn't. The FMV is the same as that unit that sold as a private sale and was in pristine condition. And, didn't the private sale net less than the amount the property for what it was sold? Sure. That's right. If a person sells a house for $100,000 they don't walk away with $100,000. Their "net" is less commission and other expenses like the real estate transfer tax and attorney bill.

So, that's NORMAL, right? I'm sure I can explain that to a person sitting 2500 miles away in an office and that has never been to this state. The bank executive will just pull out a pen and make some adjustments to the number the appraiser gave to them. They wouldn't tell me that they are just following FHA rules on a short sale would he? Besides, the Monmouth MLS doesn't have this property listed so "it's not listed" and the owner is only allowed the higher percentage number to come up with the "net" figure the bank "must get" for the sale of the property.

Stop your belly aching. This is NORMAL in real estate. In the Army they just call it a Snafu.

Gesundheit!

August 2003. I was reminded of the hottest month in real estate just the other day. Someone was telling me how the housing market has improved and we were heading back to the good old days. Really? I’m struggling to make ends meet. So, I asked for some clarification and was told how busy her husband, a title clerk, is now a day. She doesn’t mention that the “husband” works four days a week because the company cut back his hours. She doesn’t mention that almost half the work force in the company was let go almost two years ago. She doesn’t mention that several title companies in the area are now closed, including their own small office.

At any rate I am now compelled to seek out the husband and ask first hand if his work load has increased. I mean other than the stock market catch phrase of “doing more with less”, or, “working smarter, not harder” that seems to gives justification for the CEO’s pay raise, is he busier? As I approach the man, I see his body stance and think to myself, he looks a lot like me, a little worn, subdued, trying to put on a good face but his smile is strained. I ask straight out, “so, how’s business? I hear you are very busy.” I get a look of shock. I further my questions with, “are you getting commercial accounts now? Because I see some activity on some business sites that had been dormant for years. Or, is it residential?” I tell him that I am not doing much.

I can see right away that he is uncomfortable telling me about work. Not that he was shy about discussing his work back in 2003, 2004, 2005, 2006, or even, 2007. No, with his head down he states there is no commercial activity. There is no re-finance going on with his company anymore. He states that some weeks are busy and some are not. He tells me people still push for an end of month closings and most of the residential title searches are for short sales. Hmmm, seems kind of similar to my own business, or, the lack there of. He wants to drop the conversation. I take the hint and start anew with my observations about his favorite baseball team. It is a safe subject, that and weather, since we differ in our political opinions.

But, my mind is back in the day. The day my income helped support our family. It has not been that way for me for some time now. Back then Real Estate Brokers everywhere were recruiting (stealing) agents from each other or starting schools to train and recruit more agents from the student population. It seemed like Mortgage Representatives were growing on trees, stopping by our office with the promises of getting the best rates on no doc loans. And, the title companies sprung up over night. Those were the days I was remembering.

That’s right. August 2003 was the absolute peak in real estate sales for my immediate market area. The median price of a home sold during that month was $144,750 up about $10,000 from the previous year. The total homes sold for the month was a whopping 112 homes. Flippers were everywhere. And, that MLS count, does not include the many brand new homes from builders and that very special group of for sale by owners that did not list their homes with agents and share in the local Multiple Listing Service. It had been a steady climb in sales since the devastation of 9/11 in 2001 when al-Qaeda launched its attack on the Twin Towers and other targets in the US.

Area homes were believed to be undervalued by many investors. The market heated up with many home buyers coming from areas near the attack sites of 9/11. They sold their homes in North Jersey that were within commuting distance of the city for a great profit and then they came ready to pay top dollar for the home with the amenities their previous homes lacked. Corian and marble counter tops, crown moldings, stainless steel appliances, pavers, and the works. The prices of homes in our area would continue to climb until December 2005 when the median price peaked at $279,900 and days on market would fall. Imagine it taking only 29 days on the market before a house went to the closing table. That’s how it was in September 2005 – 29 days from start to finish. It wouldn’t be for another year before the then Federal Reserve Chairman, Alan Greenspan, would declare the housing market to be suffering from “irrational exuberance”. Something that some of those in the business of selling homes knew for a fact. Not everyone knew. There are enough mortgage brokers, real estate sales men and women that got caught up in the excitement and know firsthand about short sales because they had to sell their own home under those circumstances.

Many did know that the rising prices could not be sustained. Homes that were sold three months before were back on the market and selling a full twenty percent more. The flippers only had put in a minimal effort from the previous seller with a clean up, paint and new carpet. It seemed everyone was quoting Mark Twain with “buy land, they are not making it anymore.” Of course, the Arab World with its massive accumulation of oil wealth tried to mock that by building Dubai. A western lifestyle in the desert without any intimacey allowed. Those that foresaw the financial mess that was to be left behind were writing blogs predicting the end of the world as we knew it. Many predicted what other employment they could undertake when the market would no longer pay their bills. Some passed it off as just a mild adjustment.

The National Association of REALTORS launched a campaign telling the world “it’s a great time to buy” and then a new refined message with “each market was different” as soon as they were called upon to justify their first advertising blitz to the general public. To their members they sold the idea that it was a good time to hone in on your marketing skills and real estate knowledge by attending their many classes that offer the alphabet soup or letters to place at the end of their name and on their business cards. We were assured we would be in a position of advantage by paying the association to attend classes that would help our customers when they returned. It is the same organization that now says for forty bucks they will protect our jobs by sending lobbyists to Washington on our behalf.

Returning to our current market conditions, I present you with the data to show that special someone that the market may in fact be returning to that hot August in 2003. The median price of homes sold in the MLS in April 2011 was $171,500 down a little more than a hundred thousand from the high of $279,900 back in December of 2005. Last month the average days on the market was 197 days. Brokers have got to spend a lot on advertising that does little to actually get the home sold and they must push for lengthier contracts than the typical six month listing agreement. Yet, I am sure someone somewhere will declare the market has rebound since there was four more house sold that the same month in 2010. Good Luck with that. The popular web site for REALTORS states there are 253 experienced agents available to sell one of 550 active listings that are on the market today. In April 2011, 28 homes located in Tuckerton and Little Egg Harbor were sold.

That's my take on the current market condition. No pictures. No change in type. Just an opinion. You got one?

Welcome to the real world of real estate. You hung in there and you're being told that the worst is behind us. Your savings is gone and you are using your credit card to pay for the MLS and local board dues. You're working as a waitress, a pizza delivery guy, a sales clerk at Home Depot, or, some other part time job to meet your current living expenses. Well, here are the numbers from the last month of 2010:

Do those numbers look good to you? Thinking to yourself that 26 homes were sold and you only need to have sold one of them to pay your bills then let me show you your competition. Here is what Realtor dot com tells the average home buyer when they are looking for an agent.

That's 244 active agents that sold 26 homes. Still feeling lucky? Dreaming of better days? How about just one year before? You remember that one don't you? The worst year in your career, wasn't it?

Here's the numbers from the good old days:

While many are trying to maintain a stiff upper lip and shouting out predictions of a recovery, I am more skeptical of any fast return to a normal market. A market where you can make a living selling real estate is far off. Like you, I've taken a second job. My goal in real estate is to keep my health, family and the roof over our heads. 

Call me negative if that makes you feel more secure in your poly Anna rose colored glasses. My pocket is not as deep as yours. I'll sell when I can - the market they are a changing.  

The Truth is in the Numbers is ever present in the data provided by the Jersey Shore Multiple Listing Service for the month of November Housing Sales in 08087. The shared zip code for Little Egg Harbor and Tuckerton will scare the jeebies out of anyone that can do seventh grade math. Just take a look at the Not so good data from last November in 2009 and compare it to the sales performance of November 2010 below:

It was just two short months ago we (myself included), in the real estate community of sales, were ready to announce that the bottom had been reached and the cost of homes was once again on the way up. And, we can still point to a bright star in night and report some light. However, the reality is - this downward trend is most likely to continue beyond the next year (see the article in the December 5th edition of the Press of Atlantic City).

Not only has the median price of area homes declined by more than 25% in one year the days on market has shot up. The only "good" thing to come out of 18 sales compared to 46 sales the previous year is that the real estate dues to be paid by the over abundance of agents at the end of this year will most likely cause many to leave the business rather than add additional debt to their credit cards.

On a personal note, I have decided to accept a paying position making me a full time agent with a second job. I know, you have given me a mental correction to my announcement making me a "part-time agent" tied to another job. That appears to be the way the Broker looks at it. One would think I have urinated in their coffee cup with the reception I've gotten over this work change. They must think I like juggling two jobs that takes me away from my family. What have I given up in real estate to perform my other job?

I gave up floor time. Most of which, was spent making appointments for agents outside of the company for listings that belong to another agent in the company. The other function of floor time is answering the telephone to tell another agent in the office that a family member of theirs is on the other line who will call back again and again until they get to speak to Mom. In addition to that, I won't be attending the Broker's "professionalism classes" given weekly that do more to instill agent remorse than helping to build on and expand their esprit de corps ( In my humble opinion, of course). The other thing I will have stopped doing as a "part-time agent" is coming to an office to hear the water cooler chatter. Where agents express those things that the Broker never gets to hear (diplomacy and wikileaks is nothing new in the world of real estate).

The only thing I will miss as a result of my second job is the caravan to new listings. Knowing the inventory is so very important in an agent's ability to find the right home at the right price for buyers. And, marketing the listing home at the correct price for home owners to get the monkey off their backs and able to move on in their lives. To me this is the most important aspect of being free during the work day to visit homes that have been placed on the market. I am sure there will be agents that will log on and tell me that that too is a waste of valuable time. So, that may be one of the differences the consumer will find in the different agents available to them.

At any rate, I refuse to listen anymore to those "experts" in the business that want to tell me what I am doing wrong or not doing enough of to make the income I desire or need. If you want the truth, call me. I will give you the real numbers so you can make the proper decision to buy or sell a home. No crystal balls will get the job done. Balls of steel are what is used to move heavy objects smoothly from one place to another. If you are looking for the agent that can do that job, call me.

The other month I got a little excited about the sales results for September. I was not sure how exactly to interpret the raw data. Looking for a silver lining I indicated that indeed we may very well have hit bottom and on our way to a rebound. I was wrong. It was just a strike of lighting - real estate still suxs.

Compare the numbers above to the same period last year and see if you agree with the Press of Atlantic City, which claims the price of homes is on the raise. Remember, numbers don't lie, but liars use numbers.

So, I don't know how they came up with the news article or who in the National Association of REALTORS would release such mis-information to the public. I admit I was wrong on my last month optimistic view of the sales trend. Will they come forward and admit no one really knows what is going on in real estate?