Real estate isn’t all bad news
There’s a group of people I see almost every Saturday morning.
We sit and have coffee for an hour or so, catching up on what’s
been happening over the past week in everyone’s busy life. We
laugh, tell jokes, and generally have a great time.
Real estate isn’t all bad news
There’s a group of people I see almost every Saturday morning. We sit and have coffee for an hour or so, catching up on what’s been happening over the past week in everyone’s busy life. We laugh, tell jokes, and generally have a great time.
Recently one of the guys said, “To read Nants’ column, you’d think everything was great all of the time.” I guffawed at that, thinking, “What am I, some freakin’ Pollyanna?” Then I began to cogitate on the truth in that statement. I realized that while some see the glass half full and others half empty, I really do see it overflowing with opportunities and possibilities.
People will say to me, “Is the market still bad?” Bad? What is bad about this market? A few years ago there was nothing available, and people were buying houses they truly didn’t much like because it was all there was. Today we have lots of beautiful homes, lots of choice. Is that bad? There is nothing more wonderful for a Realtor than to take a client into a home, and see the entire family light up. You know they’ve found “the one.”
“But what about the sellers?” you ask. “Nothing is selling.” That just isn’t true. We still have quite a number of homes selling, but in the ocean of inventory the fish just have to be more patient. Last month in San Benito County sixteen sellers accepted contracts. Certainly one cannot expect one’s home to sell overnight (though we had just that happen in our office a few weeks ago) but properties are moving. Further north you can still find multiple offers coming in on properties.
If you don’t like this market (and some savvy investors are LOVING it), just wait a bit. The market is continually in a state of flux and this, too, shall pass as we like to say on Saturday mornings.
“Okay,” you say. “But what about all the people who are losing their houses?” Though I would never wish late payments, notice of defaults or foreclosures on anyone the fact is that as of July 97.4 percent of all mortgages were current. I’ll bet you didn’t know that, did you? If you read the papers or listen to talk radio you would imagine almost everyone is almost living in a cardboard box. This is not meant to minimize the anguish, anxiety and stress of those people caught in this situation. It’s horrible, to be sure. But it just isn’t happening to everyone.
I’m sure you won’t ask how the Realtors are doing (Like, who cares?) but I’m going to tell you anyway because it’s my column…so there. In 2002 in California we had 876,195 agents. The average income was $53, 300. In 2006, there were 1,357,732 agents with an average income of $47,200. This year, there are fewer agents – about 1,250,000 and the average income is expected to be $42,000. But of these agents, 400,000 have not listed or sold a home this year. I’m guessing we’ll see a lot less agents next year.
But for those of us who are true professionals, with a passion for the industry and a strong work ethic, this is a great time to be a Realtor. We have a chance to shine! We love the smell of napalm in the morning. This is a time when a professional can demonstrate good listening skills, problem solving abilities, negotiation skills and old-fashioned attention to details. When a problem comes up, we salivate. It’s our raison d’etre.
Okay, so what about real estate as an investment for John Q. Public? In 1969 Business Week noted the average price of a home had gone beyond what the general population could afford. Can you imagine? That figure had soared to $28,000. In 1977 National Business said just about the same thing. Gosh. At that point the average sales price was $50,000. In 1985 Money Magazine announced the era of home ownership was over. And in 1996 the San Francisco Examiner declared that a home was a bad investment.
Whoa, doggies! Where do they get this stuff? It must be the same place the now-defunct Weekly World News found Bat Boy, or the aliens who met regularly with George Bush Senior. The fact of the matter is, when you strip off the hype and the hyperbole, over the past 40years the average appreciation of real estate in California has been 7.75%. In the United States overall, that rate has been 6.9 percent.
In the words of Mark Twain, “Buy land. They stopped making it.” Everyone needs food, shelter and clothing. Our population is growing and living longer. The demand will be increasing. The correction we are experiencing right now will be good long-term for the housing market as a whole.
So, see? I’m not a Pollyanna, I’m just looking at the Big Picture. Don’t get sucked into a negative vortex. Relax, be happy.
And be kind to your Realtor.
