As a mother of two very different boys with vastly different learning styles and even greater differences in personality and temperament, I can appreciate how each of us absorbs facts and acquires information in entirely unique ways. My older son is an auditory learner, while my younger son is more visual and kinetic in nature.
As for me? I'm a little bit of both.
I typically begin each new relationship with a statistical analysis but quickly move into the caring, collaborative and service-oriented skills of my profession that seem not only appropriate but imperative in this ever-changing and evolving real estate marketplace.
Both analytical and nurturing styles come heavily into play as Buyers and Sellers carefully study the numbers and frequently reassess their decisions. It shouldn't surprise anyone that Buyers and Sellers rarely agree (initially) on where value lands. No matter what learning style suits your needs best, it pays (literally, it pays) to stay informed and open as we gather information and hash these questions out.
In the interest of staying informed, many of us at The GRUBB Company took advantage of the opportunity to see Steve Harney speak about upcoming real estate trends for 2010 at The Hyatt Regency in San Francisco a few weeks back. A highly successful Broker for more than 20 years, Mr. Harney is spreading the gospel about the need to resolutely support our clients in these more challenging times.
In other words, Realtors should strive to be part of the solution. (I couldn't agree more.)
Backed by The Wall Street Journal and The San Francisco Chronicle (Real Estate Section, Sunday, 11/8/2009) here's a brief synopsis of what Steve Harney had to say . . .
The foreclosure market will continue to grow in 2010 but less at the low end (happily, the "subprime" market is well on its way to being absorbed by investors and speculators ). The middle to high-end market will now see the biggest bump in foreclosure sales with many of these owners strategically choosing to walk away! (It's entirely an economical decision. Homeowners would rather walk than continue to pay on what they perceive to be a "declining commodity.")
This will be true throughout the Bay Area as well as here in our local neighborhoods of Oakland, Piedmont, Rockridge, Montclair, the Claremont and Berkeley. While we may be buffered by great schools, a well-educated demographic and highly-coveted communities, we won't be entirely immune. (Title Companies, recognizing this dramatic shift are already gearing up with special "short-sale" liaisons to expedite these upcoming sales and agents are quickly becoming REO specialists as well.)
Mr. Harney also projected that the U.S. government will STOP purchasing mortgage-backed securities from Fannie-Mae and Freddie-Mac by the end of March 2010 based on the lack of funds that have currently been allocated for the ongoing purchase of these mortgages. If true, this means that banks will once again need to step in and underwrite these loans (as opposed to the American public) and it's fairly safe to assume that banks won't be writing loans at 5% fixed interest for 30 years. Hmmm. We're in for more changes.
While market stimulation may still come in the form of first-time (and now repeat buyer) tax credits for home purchases, banks will, in all likelihood, raise interest rates in 2010 which translates into LESS purchasing power for consumers. (Remember, a 1% increase in the interest rates, results in approximately a 10% loss of purchasing power.) Buyers, TODAY may be your best opportunity to buy!
Now let's put these two suppositions together - IF the cost to consumers increases by way of higher interest rates AND inventory also increases via short and foreclosure sales in the middle to high-end market, this may result in depreciation of home values at the middle-upper end. (Please note, the National Association of Realtors just reported on 11/15/09 that home prices are expected to increase in 2010 which is the complete opposite of Steve's predictions here.)
While any continuing correction may prove advantageous to the Buyer in this scenario, for those of you who are waiting until next spring to place your home on the market (believing you'll receive more) you may in fact, find yourself netting far less.
If you missed the GO-GO-GO market of 2003-2006, the opportunity to sell your home now is excellent with respect to buyer incentive, low inventory, finite interest rates and expanding buyer demand.
Sellers - TODAY may be your best opportunity to sell!
Does Steve Harney have a crystal ball? No, he doesn't (Nor do any of us) but he certainly presented enough credible graphs and relevant market data to support his thesis and make me question if waiting until the spring market (as we often advise this time of year) makes the best use of this information?
Steve didn't think so and I'm not convinced either. At the very least, let's have the conversation as we look ahead. You might be better served by listing your home sooner - rather than later in terms of crafting a winning strategy in 2010.
Recognizing that Real Estate is the only industry that basis value on past performance - not future projections, Steve encouraged us to "look ahead" as we make these important decisions.
Now, how can I help YOU craft a winning strategy as you move forward?
Watching Montclair's cheerfully costumed participants parade down Mountain Boulevard in front of our GRUBB Co. office last Friday, I was once again struck by how magical a celebration Halloween is for everyone involved. From the tiniest bumblebee to the tallest and oldest trick or treater, children of all ages seem to enjoy this gleeful opportunity to explore their more dramatic side.
When it comes to Halloween, the scarier the better!
Not true for Real Estate . . . in home sales, I prefer to avoid the truly scary! As such, I've learned to cherish the transaction that runs from the beginning to the end of the process with nary a fright. In this more competitive marketplace, that disappearing transaction may have gone the way of the invisible man.
I asked my GRUBB Co. colleagues to contribute their ideas on thisHalloween special edition I am calling: "Trick OR Treat? Here are some of my favorites with my thanks to Michael, Bebe, Karen, Tricia, Dana and Carol!
Trick: Is there anything trickier than navigating a deal where Buyers and Sellers aren't telling you the whole story? (Now that's spooky!) Realtors do our best work when we have all the facts and can truly meet your needs. When hidden agendas exist, we are truly working in the dark.
Treat: The Buyers or Sellers who comes to you with thoughtful intentions, true motivations, appropriate time limits, pre-approved financing and realistic market expectations! (Now we're talking daylight!)
Trick: Entering into a multiple-offer situation without a Buyer feeling as if he/she is overpaying for the home. (Honestly, we get that can be frightening and GOOD Realtors build in a safety net! )
Treat: Buyersr who puts their best offer forward, with the knowledge thatsomeone is going to purchase the home. Why not you? If a more motivated Buyer succeeds, so be it. You can't control that but know this - the best agents protect their Buyers by supplying market data that justifies an over-asking purchase offer and insist on inspections, due diligence and an appraisal contingency! (If yours doesn't, it may be time to work with another agent.)
Trick: Renegotiating a purchase offer on behalf of a Buyer after inspections and avoiding a defensive or confrontational response or stance from the seller (very, very tricky!).
Treat: Working with Real Estate professionals on both sides of the transaction who understand that negotiations are more and more, a part of the buying and selling process and in turn, working with Buyers and Sellers who understand the need to obtain value. Negotiations should never be personal - they are simply business!
Trick: Explaining to a Buyer that the cost to acquire a home may be more than its price per square foot." In fact, house values are more than a multiplier - there is an "intangible" that goes far beyond the basic math of many houses. Figuring out or assigning the "true market value" is, in reality, exceedingly tricky!
Treat: The Buyer who is both pragmatic and yet remains open to the information provided about the market, about a specific home and about it's likely outcome. If you are still willing to go well beyond the neighborhood sales, that is your decision (Buyers often buy emotionally) but know the facts beforehand so that you are truly educated about the price you are offering. Then move comfortably forward if you so desire!
Trick: Sellers who turn down a good offer in the hopes of a better offer (really frightening)!
Treat: Sellers who understanding that the first offer is often the best offer. (Really, it almost always is!)
Trick: Sellers who overprice a home in a more challenging marketplace.
Treat: Sellers who price a home competitively to attract the highest number of buyers and the best possible outcome.
Trick: Buyers or Sellers who work with an out-of-area Realtor, an on-line Lender (Warning Will Robinson!) or an out-of-town Appraiser and are disappointed with the results. Don't expect these "out-of-towners" to know the standard practice, the geographical customs, the other players involved or the value of the local marketplace. (They just don't and it's silly to expect them to!)
Treat: Buyers and Sellers who work with their local specialists; professionals who knowledgeably understand the neighborhood you seek - not the one you are departing!
Trick: Finding the house of your dreams and having it realized!
Treat: Finding the house of your dreams and having it realized!
Halloween should be scary fun, but buying a home shouldn't be scary at all. While buying or selling Real Estate might seem frightening at first glance, beneath the make-up and with the right representative, partnered with a well-respected brokerage firm, it isn't actually scary at all.
Trick or Treat!
Julie Gardner, has been writing The Perspective for 12 years and has published more than 500 essays. She is also a frequent contributor to the Sound Off column in the Real Estate section of The San Francisco Chronicle.