When the Heat Goes On, the Price Comes Down

As I put on my first long-sleeve shirt of the season to go running this morning, I reflected on what the changing weather means for real estate.  Although spring is the traditional listing and buying season, based on the school year schedule, Labor Day brings a bump that lasts until about Thanksgiving.  For sellers, the first time that they think about heating a home that's empty, or one that's too big, they also begin to worry about freezing pipes, snowplowing, and all the downsides of winter.  We are not unaccustomed to getting calls from sellers, who previously had been saying that they were not in a hurry and didn't have to sell, asking why there have been no offers.  At that point, they are often willing to get serious about pricing their property to move quickly.  Of course, we remind them that they have a window before winter, which is quickly disappearing.

If you are a buyer, this is when you should be serious also.  It can take longer to close during holiday season, so don't take too long to make your offers and sign your contracts.  The end of the year is rapidly approaching.  Take advantage of this time to buy a great home at a good price with a low mortgage rate!

Vacation post

Just a quick update from Scottsdale. It feels mean to say that it's 77 degrees and sunny here every day, when there is so much cold and snow in Connecticut! But everybody needs a break, and this is mine. I run a lot, read a lot, and just generally chill out. We've played golf, shopped, and fiddled around.

Phoenix has been very badly hit by the economic downturn, and it shows how lucky we are in our region not to have the tremendous overbuilding that exists here. There are shopping centers and restaurants on every corner; it's hard to imagine where all the business can come from to keep them afloat. They've had phenomenal job growth here as well, but now they're just ahead of Detroit in new job growth, so the party's over. Our education and health care-based economy looks pretty good in comparison.

Summing up 2008

As the new year begins, we're taking stock of how we ended last year. The news is not quite as bleak at H. Pearce as one might have thought. We're down a little over 15% in commissions earned from the year before. Since that takes into account that prices fell, reducing commissions due, plus that numbers of sales fell, we did very well compared to the market as a whole. One of the agents brought in a check on December 31st and told me that 2008 was her best year ever. More agents than I would have thought could say the same thing. In fact, a couple of months ago I checked an earnings report, and noted that 52% of our agents were ahead at that point of their earnings from 2007. That may have changed somewhat by the end of the year, but probably not by that much. It shows that, in this difficult market, whom you choose to sell your property matters. Good agents are more valuable than ever.

We're still waiting to see whether we made a profit as a company in 2008. It's close enough that we can't tell yet. That's good news in this economy! We look forward to making money in 2009, in part by concentrating on the things that will increase: relocation; rentals; appraisals; refinancings; and short sales, in addition to our regular business.

On another note, the running season began with a very cold and snowy Frostbite 5K in Guilford on Thursday morning. The sun was bright, but the snow wasn't all melted and the winds were whipping across the Guilford fairgrounds and the town dock, so all the times were slow. Well over 300 people braved the elements, though. Joel Galvin represented H. Pearce with his wife, Nan, as they helped to man the Guilford Rotary benefit race.

2009 Can't Come Too Soon

We real estaters are eagerly awaiting the drop of the ball in Times Square, so that the page can turn from 2008 to 2009, when we fervently hope that consumers will start buying real estate again. On my run this morning, I was explaining to one of my friends that it DOES make sense to trade up, since he will save more on the new house than he will "lose" selling the old one in this market. When will people stop putting their lives on hold? Of course, I'm biased.

I've been thinking a lot about consumer behavior over the past few days. We went to see Frost/Nixon in the Connecticut Post Mall, and discovered that the world is indeed still flocking to malls, or at least they were there, searching for bargains, on the day after Christmas. Movies seem to be attracting crowds, as we've seen on our movie binge after Christmas. In addition to Frost/Nixon, we saw Milk and Doubt. Of the three, Milk stands out as an amazing film; of course, I did see the play versions of the other two, so the suspense wasn't there. We saw all those movies after seeing several plays in a row at the start of the month. We loved A Civil War Christmas at Long Wharf Theatre, Rough Crossing at Yale Rep, and Mamma Mia at the Shubert, plus I also enjoyed Sister's Christmas Catechism at Long Wharf. It's amazing to be able to live in a small city like New Haven and see such a broad diversity of great theater. A Civil War Christmas, in particular, I expect to see popping up all over the country in the next few years--but we saw it here first!

According to other friends, liquor is selling, beauty salons are doing well, and restaurants seem to be holding their own. The last fact really puzzles me, and maybe it's not true. It seems as though eating out would be the first luxury to go, before you stop buying cars and clothes. I went into a clothing chain store yesterday, and the clothes seem to be selling for less than the cloth alone would cost. I'm glad that all you need to run is a pair of sneakers!