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Showing posts with label sales. Show all posts
Showing posts with label sales. Show all posts
Friday, July 6, 2012
Wednesday, June 13, 2012
Women's Pay
There is a very interesting article in this morning's New York Times about the slowing of equal pay for women in the work force. The gap between men's pay and women's decreased steadily for several decades, but has now stopped, as has the entrance of more women into the workforce. There are many reasons for the persistent discrepancy, with about 9%, according to one study, being due to discrimination.
It's different in real estate. We're the original "equal pay for equal work" profession. Even when women were discriminated against in sales situations, we still paid the same amount to women for the sales they had. It may be surprising to some to know that women were once the minority in the real estate agent pool, because that dynamic has shifted completely. In fact, one of the major factors in that shift is the fact that women could go into real estate without having to work next to a man who was getting paid more for the same work. In addition, child care, which was cited in today's article as still being the cause of some of the remaining pay differential, is less of an issue in real estate, where the hours and days are flexible.
There is a downside to real estate pay, of course. You only get paid when something sells or leases. Agents receive a commission at the closing or signing, and a 1099 at the end of the year, so they are responsible for many of their own expenses and taxes. We "eat what we kill", from a compensation point of view, so not everyone can afford to enter this field, because you have to spend money while you are getting up to speed. But it's nice to know that, when you do succeed, you won't be dependent upon someone else to decide what you will earn. When you combine that with the flexibility, variety, and the satisfaction of being your own boss, we expect to see a lot more younger people--both men and women--turn to real estate as a career.
It's different in real estate. We're the original "equal pay for equal work" profession. Even when women were discriminated against in sales situations, we still paid the same amount to women for the sales they had. It may be surprising to some to know that women were once the minority in the real estate agent pool, because that dynamic has shifted completely. In fact, one of the major factors in that shift is the fact that women could go into real estate without having to work next to a man who was getting paid more for the same work. In addition, child care, which was cited in today's article as still being the cause of some of the remaining pay differential, is less of an issue in real estate, where the hours and days are flexible.
There is a downside to real estate pay, of course. You only get paid when something sells or leases. Agents receive a commission at the closing or signing, and a 1099 at the end of the year, so they are responsible for many of their own expenses and taxes. We "eat what we kill", from a compensation point of view, so not everyone can afford to enter this field, because you have to spend money while you are getting up to speed. But it's nice to know that, when you do succeed, you won't be dependent upon someone else to decide what you will earn. When you combine that with the flexibility, variety, and the satisfaction of being your own boss, we expect to see a lot more younger people--both men and women--turn to real estate as a career.
Thursday, May 24, 2012
Are Prices Starting to Rise?
As with many things, prices are local--very local. In addition, price indices are rarely apples-to-apples comparisons. They usually take prices on one date and compare them to prices as a whole on another date. For example, the Case-Shiller Index actually takes the total sales of all the property in a city and compares it to the total value of the property sold in that city in an earlier period, to calculate the rise or fall of real estate values over a period of time. That means that it's hard to know what would happen to one specific property when it got sold or resold.
In the current market, sales are being driven by first-time homebuyers and are strongest at the low end of the price spectrum. Overall, prices are flat or still falling slightly, although this does lag in time, due to reporting delays. However, we are beginning to see appraisal problems again, which had not been occurring in recent months. That indicates that prices are rising, thereby pushing up sales prices above levels of past reported sales, which are used by appraisers to calculate value.
What's the bottom line? Prices at the lower end are being squeezed by supply and demand factors, and are probably heading up. Higher-end sales are still waiting for that phenomenon to take place.
In the current market, sales are being driven by first-time homebuyers and are strongest at the low end of the price spectrum. Overall, prices are flat or still falling slightly, although this does lag in time, due to reporting delays. However, we are beginning to see appraisal problems again, which had not been occurring in recent months. That indicates that prices are rising, thereby pushing up sales prices above levels of past reported sales, which are used by appraisers to calculate value.
What's the bottom line? Prices at the lower end are being squeezed by supply and demand factors, and are probably heading up. Higher-end sales are still waiting for that phenomenon to take place.
Tuesday, May 8, 2012
Lots of Cash
Many more real estate sales lately are for cash. While it's true everywhere in the country, it's particularly true in Connecticut. Can you guess the percentage of people who close with cash? If you guessed 39%, you're right!
While that seems like a lot, and it is, it makes some sense when it's so cumbersome to fill out the paperwork for a mortgage, and when the restrictions are so much tighter. I suspect that some number of those buyers later apply for, and receive, mortgages, especially with rates so low (although they're certainly not losing much in the way of interest on cash, and they don't have a great deal of stability in the stock market).
When there is no mortgage, the closings often happen much sooner. We see people closing in a couple of weeks, once all the inspections are finished. Getting a mortgage later really speeds the process up.
One tricky question, however, is how to know whether the buyer is serious and qualified, without the help of the mortgage qualification letter. It seems strange, but it's sometimes easier to believe that someone is really going to buy if they are borrowing the money, than when they say that they have it in the bank. Not a bad issue to have, I guess, but it has been arising more frequently. The danger of real damage is less, however, when the closing is quick. Nothing's perfect, but cash is king!
While that seems like a lot, and it is, it makes some sense when it's so cumbersome to fill out the paperwork for a mortgage, and when the restrictions are so much tighter. I suspect that some number of those buyers later apply for, and receive, mortgages, especially with rates so low (although they're certainly not losing much in the way of interest on cash, and they don't have a great deal of stability in the stock market).
When there is no mortgage, the closings often happen much sooner. We see people closing in a couple of weeks, once all the inspections are finished. Getting a mortgage later really speeds the process up.
One tricky question, however, is how to know whether the buyer is serious and qualified, without the help of the mortgage qualification letter. It seems strange, but it's sometimes easier to believe that someone is really going to buy if they are borrowing the money, than when they say that they have it in the bank. Not a bad issue to have, I guess, but it has been arising more frequently. The danger of real damage is less, however, when the closing is quick. Nothing's perfect, but cash is king!
Friday, April 27, 2012
Pearce Relocation Awards
We belong to the largest referral network of affiliated brokers out there--Leading Real Estate Companies of the World. This collection of outstanding independent brokers produces more listings and sales than any of the franchise organizations. At our annual meeting this week, Pam Chute came to present us with three awards for the most sales volume in outgoing referrals and sales production. One of the awards we have actually won for three years in a row.
Sometimes people don't realize that we can help them move around the world as well as around the region. And we're good at it! Sometimes, we even forget to tell those relocating that we can help them anywhere. In fact, there are companies in our region who use us all over the globe to transfer hirees and current employees from one place to another. I thought that by posting this blog entry I could both salute our relocation department and our affiliate Pearce Plus Relocation, as well as ensuring that everyone knows and appreciates our capabilities on a national and international level. Obviously Leading RE does!
Sometimes people don't realize that we can help them move around the world as well as around the region. And we're good at it! Sometimes, we even forget to tell those relocating that we can help them anywhere. In fact, there are companies in our region who use us all over the globe to transfer hirees and current employees from one place to another. I thought that by posting this blog entry I could both salute our relocation department and our affiliate Pearce Plus Relocation, as well as ensuring that everyone knows and appreciates our capabilities on a national and international level. Obviously Leading RE does!
Tuesday, January 17, 2012
The Tide is Turning
Probably most of you think that prices in real estate are dropping, with no end in sight. I would certainly think so as well, if I went by what I read in the national press. That's why I found it so interesting to look at our numbers for the region for the last quarter of 2011.
Prices in the New Haven area went up 0.7% for the last quarter of 2011 versus the last quarter of 2010, and the number of sales went up 2.8% for the same period. While that might not seem like much of a jump, it must be compared to the impression people have that prices are falling. It's not apples to apples--it measures the total sales against the total sales, not the same houses being transferred each year--but it's a good indicator that the bottom of the market may well have come and gone. When both prices and units rise, it's not too likely that one of the trends is an aberration. Prices may not jump, and there may be a few hiccups involving taxes and financing, but the fundamentals are there, and we should see some of the rewards this year.
If you are interested in seeing all the statistics yourself, please check our website at http://www.hpearce.com/.
Prices in the New Haven area went up 0.7% for the last quarter of 2011 versus the last quarter of 2010, and the number of sales went up 2.8% for the same period. While that might not seem like much of a jump, it must be compared to the impression people have that prices are falling. It's not apples to apples--it measures the total sales against the total sales, not the same houses being transferred each year--but it's a good indicator that the bottom of the market may well have come and gone. When both prices and units rise, it's not too likely that one of the trends is an aberration. Prices may not jump, and there may be a few hiccups involving taxes and financing, but the fundamentals are there, and we should see some of the rewards this year.
If you are interested in seeing all the statistics yourself, please check our website at http://www.hpearce.com/.
Tuesday, December 21, 2010
Is the Tide Turning?
Yesterday was the busiest day for property sales that we've had in a long time. I spent the morning today trying to track down the reasons, and there are several possible causes. Two sales came about because the owners brought down their prices. In at least one instance, that produced multiple offers, so clearly buyers are motivated also. They aren't closing before the end of the year, so I don't think it's for tax purposes on the seller's part. It could, however, be due to the cold weather and the arrival of heating bills.
Two of the buyers are coming from Manhattan, so we're wondering whether the bonuses came early this year. There have been some news articles that make that claim, so it could be true. One buyer is about to start a new job, and was in a hurry (although, in the past, those people could have--and probably would have--rented in the short term). One renter turned into a buyer, and that could be an outgrowth of interest rates rising, with the prospect of higher rates next year.
We've had walk-ins as well, which means that people have gotten the message that the time to buy is now. Or maybe it's our Christmas present as agents! Either way, we'll take it.
Two of the buyers are coming from Manhattan, so we're wondering whether the bonuses came early this year. There have been some news articles that make that claim, so it could be true. One buyer is about to start a new job, and was in a hurry (although, in the past, those people could have--and probably would have--rented in the short term). One renter turned into a buyer, and that could be an outgrowth of interest rates rising, with the prospect of higher rates next year.
We've had walk-ins as well, which means that people have gotten the message that the time to buy is now. Or maybe it's our Christmas present as agents! Either way, we'll take it.
Wednesday, July 21, 2010
Stimulus Money
Everywhere I've driven lately seems to have road construction going on, and it seems to be paid for by Federal stimulus money. You certainly can't tell by driving around that towns and cities are in fiscal crisis! The real estate stimulus money is gone, even though closings that were delayed can still take place through an extension bill passed recently.
I was one of those who thought that giving a tax credit to first-time homebuyers was unnecessary. First of all, they are the people most likely to buy under any circumstances. Secondly, interest rates are very low. And lastly, I thought it was repeat and second-home buyers who needed pushing.
I guess I was both right and wrong. Most buyers didn't even qualify for the full tax credit, or even part of it. Although the second version of the credit allowed repeat buyers to participate, many of them earned too much to get the benefit. However, it's clear that sales plummeted as soon as the stimulus money expired. That indicates that even those who did not get the money back were affected by the offer. And, as we all know, perception is reality. Whatever it took to get buyers off the fence was needed, and the tax credit seemed to help. It moved people who would have bought anyway into an earlier closing, which pushed sales up in the first part of the year, and will have a negative effect in the second half.
There is another kind of stimulus available, however, and that's a perceived bargain. Sellers can make their properties attractive by lowering prices. There's a great deal of evidence that that is exactly what's happening in some segments of the market. Things are selling, but at discounts off the asking prices. Even in New York City, long considered exempt from the housing recession, recent articles have referred to big discounts leading to sales. Until the Federal government acts to spur housing again, we'll have to depend upon owners doing it through pricing. And, given the normal seasonal fluctuations in the market, they'll have to do it soon if they want to sell in 2010.
I was one of those who thought that giving a tax credit to first-time homebuyers was unnecessary. First of all, they are the people most likely to buy under any circumstances. Secondly, interest rates are very low. And lastly, I thought it was repeat and second-home buyers who needed pushing.
I guess I was both right and wrong. Most buyers didn't even qualify for the full tax credit, or even part of it. Although the second version of the credit allowed repeat buyers to participate, many of them earned too much to get the benefit. However, it's clear that sales plummeted as soon as the stimulus money expired. That indicates that even those who did not get the money back were affected by the offer. And, as we all know, perception is reality. Whatever it took to get buyers off the fence was needed, and the tax credit seemed to help. It moved people who would have bought anyway into an earlier closing, which pushed sales up in the first part of the year, and will have a negative effect in the second half.
There is another kind of stimulus available, however, and that's a perceived bargain. Sellers can make their properties attractive by lowering prices. There's a great deal of evidence that that is exactly what's happening in some segments of the market. Things are selling, but at discounts off the asking prices. Even in New York City, long considered exempt from the housing recession, recent articles have referred to big discounts leading to sales. Until the Federal government acts to spur housing again, we'll have to depend upon owners doing it through pricing. And, given the normal seasonal fluctuations in the market, they'll have to do it soon if they want to sell in 2010.
Wednesday, April 28, 2010
First Quarter Market Statistics
Our crack internet team has just finished compiling statistics on sales and prices in our region for the first quarter of 2010. Yes, it's true--the market is way up. Sales in New Haven county are up 34% over the same period last year. Prices fell 7%, which was less than they had been falling, and also reflects a shift in the mix of what's selling. The first-time homebuyer tax credit has the greatest impact in the lower price ranges, and that will make a difference. Also, the upper end of the market tends to be the most discretionary, and the lack of consumer confidence has had those buyers continuing to sit on the fence. If you'd like to see the full report, go to http://www.hpearce.com/, and pull down the Services tab to access Market Reports.
I just got back from a meeting of some of my peers, the presidents of other large independent real estate firms. Around the country, the news is much the same. Last year was so bad that we're all feeling better. We're all worried about what will happen when the tax credit disappears on Saturday, but we all agree that this second round has not been as effective in spurring sales. All of us have slashed costs, but know that a healthy company cannot survive in the long run by cutting expenses instead of increasing sales. We are fortunate here compared to markets like Reno, but even my friends there are seeing an improvement. Since 67% of their sales are foreclosures and short sales, that wouldn't be hard! We continue to be encouraged that independent firms are doing so well in competition with the franchises, and know that our ability to move quickly and make decisions has helped us immensely in this downturn. We were meeting in Davenport, Iowa, where the market never spiked the way ours did, so the landing has been much softer. There is a lot of activity there, and the average home price in some offices is about $90,000. That would be quite a bargain here!
I just got back from a meeting of some of my peers, the presidents of other large independent real estate firms. Around the country, the news is much the same. Last year was so bad that we're all feeling better. We're all worried about what will happen when the tax credit disappears on Saturday, but we all agree that this second round has not been as effective in spurring sales. All of us have slashed costs, but know that a healthy company cannot survive in the long run by cutting expenses instead of increasing sales. We are fortunate here compared to markets like Reno, but even my friends there are seeing an improvement. Since 67% of their sales are foreclosures and short sales, that wouldn't be hard! We continue to be encouraged that independent firms are doing so well in competition with the franchises, and know that our ability to move quickly and make decisions has helped us immensely in this downturn. We were meeting in Davenport, Iowa, where the market never spiked the way ours did, so the landing has been much softer. There is a lot of activity there, and the average home price in some offices is about $90,000. That would be quite a bargain here!
Tuesday, February 9, 2010
Commercial Update
The national news about the state of commercial real estate really could not be much worse. I've heard it described as the "first or second inning of a long game", meaning that the decline in prices and activity is only going to get worse over the next couple of years. Financing is probably the biggest issue; many people are on loans referred to as "extend and pretend", meaning that they are not loans that would be made today. Owners are paying fees to keep those loans in place, in the hopes that they can make it through this period with bank financing in place. Some cities have lots of foreclosures. Others have lots of empty space--Phoenix alone has 80 million square feet of empty space.
Surprisingly, however, what we're seeing in our two offices, in North Haven and in Rocky Hill, is an increase in calls and potential clients. Our listings have more showings than they've had in a long time. Our ads are bringing in inquiries. Agents are busier.
This doesn't translate right away into sales and leases, and certainly not into commissions. We have two very large transactions where the deals are done, but we have not been paid, or paid in full. There are lots of other incidences of agreements in the pipeline, but not signed. It's very common for a tenant or buyer to find exactly the space they want, yet not make up their minds to pull the trigger. Other deals fall through on financing snags, so the picture is not all rosy.
Even still, there are some types of property that we could sell much more of, if we had the inventory. That includes first and foremost small free-standing buildings of 6 to 12,000 square feet. We have one such listing that just went under contract after a furious bidding war, and will sell for over the asking price. There is also significant interest in medical space. Doctors, and it seems most other professions, all want to own rather than rent. So we're hopeful about 2010, and that seemed highly unlikely even a couple of months ago.
Surprisingly, however, what we're seeing in our two offices, in North Haven and in Rocky Hill, is an increase in calls and potential clients. Our listings have more showings than they've had in a long time. Our ads are bringing in inquiries. Agents are busier.
This doesn't translate right away into sales and leases, and certainly not into commissions. We have two very large transactions where the deals are done, but we have not been paid, or paid in full. There are lots of other incidences of agreements in the pipeline, but not signed. It's very common for a tenant or buyer to find exactly the space they want, yet not make up their minds to pull the trigger. Other deals fall through on financing snags, so the picture is not all rosy.
Even still, there are some types of property that we could sell much more of, if we had the inventory. That includes first and foremost small free-standing buildings of 6 to 12,000 square feet. We have one such listing that just went under contract after a furious bidding war, and will sell for over the asking price. There is also significant interest in medical space. Doctors, and it seems most other professions, all want to own rather than rent. So we're hopeful about 2010, and that seemed highly unlikely even a couple of months ago.
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