Tim Lamont

I read this article the other day.

It contains several points that we've been trying to make for months now. Among them, if the price is right the property will sell! The article looks in detail at a property which was priced correctly to generate so much buyer interest that they had multiple offers and ended up selling $10,000 over the asking price.

Buyers are still there, but they have more to choose from than before. The three factors identified in the article are location, condition, and price. Sound familiar?

Oh well, at least there is one reporter who took the time to point out that the real estate market still has its success stories.

Suppose when you get home from work tonight, you learn that your clothes dryer is broken. What would you do?

Well, many of us would probably begin researching a new dryer online. Perhaps going to GoodHousekeeping.com or ConsumerReports.com to learn a little, or perhaps straight to Sears.com or Lowes.com to begin to price them. Let's say you've done that and have narrowed your search. Some of us would order online, but others wouldn't feel comfortable spending several hundred dollars sight unseen. So, you hop in your car and head to the store.

Once you are there, you narrow the selection down to these two dryers.

They look the same. They are the same size, same capacity, same energy usage, same number of cycle options, same warranty, same shipping, same everything. Except, one on the left costs $400 and the one on the right costs $700. Which would you buy?

Most people would opt for the $400 model, since everything else is equal. However, just as you are about to make your choice, the sales person says this:

"Allow me to demonstrate something that may affect your choice. The dryer on the right, the one for $700, when the dry cycle is complete actually irons, folds, and puts away your clothes for you." The buzzer goes off, the door opens and out pops perfectly ironed and folded clothes straight into a nearby dresser! Now which one do you buy?

Think about it. How many of you Gentle Readers drive a Mercedes Benz or BMW versus a Chevrolet Aveo? Why? The Aveo gets better gas mileage and you can buy a brand new Aveo every 6 months for what one Mercedes costs. So, why don't we all drive Aveos?

Because we are consumers and most consumers are willing to pay extra to get extra.

But, consumers have to know they are getting extra, and the extra has to have value. Once you learn the extra "value add" things you and your company do for your clients, your job is to make sure your consumers know all about them.

OK, by now I'm sure many of you are wondering what my point is here. It is simply this: If you never demonstrate to a consumer how you are different from your competition, why you are better, do not blame the consumer for making their choice based on price alone.

I just read this article on CNNMoney. It talks about the "housing implosion" and how the Case/Shiller Home Price Index is predicting a continued price drop in 75 of the 100 markets in their list. OK, sounds pretty bad and, in fact, being in the business we see some of the worst of it first hand.

But take a bit of a closer look at the table they present. Notice the second column. That number is the price appreciation experienced over the last 5 years. Only 2 of them are negative and the vast majority are far higher than the last column - which is the predicted price change from '08 to '09. In other words, even in markets where prices are predicted to drop most homeowners are better off than they were 5 years ago.

Take Philadelphia as an example. The median home price is $200,000. That represents a 50% increase from 5 years ago. So, 5 years ago the median was $133,333. Even if Case/Shiller is correct and prices drop 11.1% in 2009, that will make the median $177,800. This is still 33% higher than 5 years ago.

Now, I am not trying to say there is no housing crisis. We all know there is a huge amount of pain being experienced all across the country in this industry. Look at Detroit, for example. Not only did they lose 6.3% over the last 5 years, but they are predicted to lose another 8% in 2009. There are plenty of examples like this, but not as many as the headline writers would lead us to believe.

My question is this: why isn't the headline "Median Price Up 33% In 6 Years!"? Wait, I think I know. That would not sell as many papers.

It seems the bad news concerning the housing and mortgage markets far outweighs the good. However, the impression I get is that's mainly due to the coverage choices the various news sources make. Bad news sells, so they report more bad news.

Finally, here is an articlefrom the Providence Journal that shows a bit of good news. Granted, the price ranges discussed dont apply to most people, but at least the "feel" of the article is positive.