I'm looking at the figures for June and July in our New Haven office, and they're great! We sold as many units in those two months as we did year-to-date through May, and the two months together were 50% over June and July of last year in both units and volume! This week was the best week they've had in at least two years. What's particularly surprising is that it's happening in what is usually a very slow month, and finally hot and humid to boot. Maybe all the hype about hitting bottom is old news, and we're on the way up!
The Case-Shiller index for last month also showed a halt in the decline of prices, and it corroborates my earlier paragraph. We are also finding our Wallingford Regional office to be running ahead of last year in sales, so it's not just New Haven (although Yale continues to be a driving force in the local real estate market).
I was at the Lexus dealer yesterday, and Dave McDermott and I had a friendly argument as to whose business was worse this year. He has trouble with my argument that at least he has his excellent service department to bring in revenues. Dave says that customers want to buy, and that credit is the issue. I'd say we're both in much the same situation, although, if he reads this blog, he's going to think we're in clover now. I wish...
Wednesday, July 29, 2009
Wednesday, July 22, 2009
Market Spike?
We're experiencing a late, late spring market surge, even though it's July. Our New Haven office has posted record sales for the past six weeks, and all offices seem flat out, despite the signs that summer has finally come. The New Haven numbers are still largely driven by Yale, and we hope that continues. All offices say that the strongest activity is in the FHA mortgage range (under $387,500 for a mortgage), and in first-time homebuyers. Lower price ranges, except again near Yale, move much faster.
Our hope for first-time buyer interest is that the national unemployment rate starts to go down. As the parent of twenty-somethings, I hear many stories of lost jobs, postponed starts, and pay cuts. While it may be slightly older people who go into the real estate market, the "last in, first out" theory of human resource layoffs has many newer workers nervous. When they, and their parents, start feeling more secure about their future job prospects, more of them will jump in at these low interest rates.
If we're brave enough to wish for anything else, we're keeping our fingers crossed that sellers understand the fragility of the current market, and respond reasonably and positively to negotiations and problems that occur along the way to the closing. It may be the general national stress level, but I hear a lot of stories about sellers who just won't compromise, even when it's in their interest to do so. Good thing our agents are so talented!
Our hope for first-time buyer interest is that the national unemployment rate starts to go down. As the parent of twenty-somethings, I hear many stories of lost jobs, postponed starts, and pay cuts. While it may be slightly older people who go into the real estate market, the "last in, first out" theory of human resource layoffs has many newer workers nervous. When they, and their parents, start feeling more secure about their future job prospects, more of them will jump in at these low interest rates.
If we're brave enough to wish for anything else, we're keeping our fingers crossed that sellers understand the fragility of the current market, and respond reasonably and positively to negotiations and problems that occur along the way to the closing. It may be the general national stress level, but I hear a lot of stories about sellers who just won't compromise, even when it's in their interest to do so. Good thing our agents are so talented!
Tuesday, July 14, 2009
Second Quarter Results
A little silver lining to the real estate cloud--our second quarter results show definite improvement over the statistics of the first quarter. It's still bad, but getting better. The whole Northeast is down about 13%, and this area is about the same. If you multiply that times the decrease in the average price, you get a decline of about 23% from last year. That number includes a lot of foreclosure real estate, which usually transfers at lower prices, so the H. Pearce numbers look better. Our second quarter was less than 10% off from the year before. It tells you something about the past couple of years that such a result would make us happy!
When asked what I thought would happen in the last half of the year, I predicted a further narrowing of the decline. Although prices may fall more in some areas, it looks as though activity will not go down further, due to a combination of consumer confidence and government support.
The numbers also seem to show that people who use a Realtor get more for their homes than people who do not. While this can be explained in a number of ways, I have little incentive to argue with it!
When asked what I thought would happen in the last half of the year, I predicted a further narrowing of the decline. Although prices may fall more in some areas, it looks as though activity will not go down further, due to a combination of consumer confidence and government support.
The numbers also seem to show that people who use a Realtor get more for their homes than people who do not. While this can be explained in a number of ways, I have little incentive to argue with it!
Tuesday, July 7, 2009
Will Prices Go Down More?
Many media and industry experts are saying that the total price drop on the average home in this economic decline will total 35 to 40%. If that's true, there's another big drop to come. I think the wild card is the effect of the stimulus plan. No economic indicators from the past can be entirely accurate when compared to what we are seeing now. Although, IMHO, there is a great deal to criticize about the way in which the government has gone about randomly helping some people and not others, the result is that activity has been propped up through a combination of relief, tax credits, and a moratorium earlier in the year on foreclosures. It's anyone's guess as to what would have happened to the real estate market had those things not occurred, and it's equally unclear what would have happened had the program been rolled out differently, but it IS clear that billions of dollars have been dumped into the economy. No programs from the past have been as sweeping.
Will everything that has been done keep prices from falling as they would have? It's almost like having a shelf over the side of a cliff, where someone who falls off can land, and keep from tumbling further. Here's hoping that the cliff is big enough and sturdy enough for us all to huddle in safety!
Will everything that has been done keep prices from falling as they would have? It's almost like having a shelf over the side of a cliff, where someone who falls off can land, and keep from tumbling further. Here's hoping that the cliff is big enough and sturdy enough for us all to huddle in safety!
Wednesday, July 1, 2009
Closings
Yesterday and today are the two biggest closing dates of the year, in no small part because no taxes need to be adjusted, as tax years run July 1st through June 30th. As a result, the tension level around real estate offices is very high these days. Not only are we dealing with all the problems of the current market, but sellers and buyers are under enormous stress, as they try to get into and out of homes quickly. Sometimes they are trying to get in while someone else is still trying to get out, which is one of the situations we've been faced with today.
It's the time I feel sorriest for real estate agents, who often take real abuse from overwrought clients. It's often that the clients disconnect their mouths from their brains, and blast the agent simply because he or she is lower on the food chain (meaning, simply because they can). Agents are usually very good about letting it roll off them, but they may not forget it quickly. I would write some of the things they say, but it wouldn't be family friendly!
In addition, agents often get asked to do the most menial tasks. Again, they usually comply, because they want their clients to be happy, but we have to laugh to ourselves. One agent's husband was amazed that she was driving 50 miles round trip this week at the request of her client, and buying a 6-pack of Coke and 2 Chicken a la King frozen dinners to be left in the refrigerator of a rental home.
It may be all in a day's work for the agent, but it's worth noting that they deserve some kudos for all that they do!
It's the time I feel sorriest for real estate agents, who often take real abuse from overwrought clients. It's often that the clients disconnect their mouths from their brains, and blast the agent simply because he or she is lower on the food chain (meaning, simply because they can). Agents are usually very good about letting it roll off them, but they may not forget it quickly. I would write some of the things they say, but it wouldn't be family friendly!
In addition, agents often get asked to do the most menial tasks. Again, they usually comply, because they want their clients to be happy, but we have to laugh to ourselves. One agent's husband was amazed that she was driving 50 miles round trip this week at the request of her client, and buying a 6-pack of Coke and 2 Chicken a la King frozen dinners to be left in the refrigerator of a rental home.
It may be all in a day's work for the agent, but it's worth noting that they deserve some kudos for all that they do!
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