I must hear this question 20 times or more each week from friends, family, and casual acquaintances. “So, how’s the market?” I know that people are genuinely curious, so I endeavor to give them the truth, rather than glossing things over. I am not of the always-say-it’s-great school of thought on this.
Here’s my current answer, although it’s not presented in its entirety, of course:
I am surviving, which is more than a lot of people can say these days. It’s certainly better than last year, which was tough. That being said, it’s nowhere near where I would like for it to be.
Mortgage financing guidelines have swung too far from the free and easy days, when anyone could get a loan. I would estimate that the combination of removing subprime and zero-down loans from the table, along with making it much harder for those who are self-employed, has removed at least 1/3 of our viable market. If I had 10 people who were ready, willing, and able to buy a home back in 2006, I now have 6 or 7.
Additionally, I have had three recent appraisals that didn’t come in high enough, largely because of new rules governing this process. Although I can understand why they don’t want lenders to control appraisers, I do think it’s important for an appraiser to understand the properties that they are attempting to value.
The first-time home buyer incentive helped a small number of our clients to make a move, but others seemed not to understand or care about this money, for some odd reason. Overall, it didn’t make a big splash, in my humble opinion.
Buyers and sellers are generally skittish these days, and our former specialty, relocation, has dried up quite a bit, since other markets around the country are years away from a true recovery. Simply put, if people can’t sell their other home, they need to rent here first, for an indeterminate period of time. The last three clients that I had lined up decided not to move, or to rent for a year.
Realistically, I’m not certain that I can handle another year like this one, although we have managed to keep our heads above water financially. I feel like I am well-positioned for when things turn around, but who knows when that will happen? I am generally a big optimist, but we have tightened our belts a lot and we’re still feeling the pinch.
I have seen a lot of really solid agents leave the business, both locally and around the country from my network of contacts. I remember back when people were talking about how the tough market would “weed out” the bad agents. It has cut far deeper than that, it seems.
Sorry if this comes across as a negative post – I just felt like writing about this, I guess. Truthfully, I know how good I am at this business and I am in a “good” local market, so it makes me wonder how bad it must be in the markets I hear about on the news and here on AR.
So, if you have a friend or client ask this question, and things are not going well for you, how do you answer? It certainly seems disingenuous to make things out to be rosier than they really are, right?