BIG DAN's First Posting

Well it is the New Year and excitement, anticipation, expectations are all in the wind about this year in real estate.

As this blog grows I hope to develop dialogs with visitors about topics regarding New Construction (A Passion of Mine) first time home buyers, Sellers Markets, Buyers Markets, upsizing, downsizing, technology in Real Estate the Pros the cons and the Caveats, issues of finance, the "third" market that I call the Sellers/Buyers Market, which I feel is indicative of our current market with a few exceptions, which I will expand on in a near future post. Of course topics of visitors choice will always be welcomed as long as they are appropriate to this blog, we can veer a little off center but lets not go to far.

Tasteful humor and homeowner/home-care tips are always welcome here.

Well we've started the journey lets go forth and develop this into a Great Place for all of us to gain a better understanding of Real Estate in St Louis and some other other fun stuff. I hope to learn a lot of valuable information from you and hope you will learn from me.

BIG DAN "The" Real Estate Man   

Housing Recovery

Just watched Jim Cramer on CNBC, he is hot on the idea that Bernahkes  announcement will turn the housing market around, no, has turned the market around, has forced the bottom. 4% rates for everyone. He said run to buy a homes. The key to everything he said was that the housing market has to turn for us to have a recovery and thinks this is it.

My thoughts, I agree the housing market has taken us into economic downturns in the past and and has brought us out of it as well. I heard the other day that now is the BEST time for people to invest in NEW banks mainly because they start out with not having the baggage of this economy, makes sense to me, but I'll go one better. It was the recession of the early '80's that took down an industry called "Savings & Loans" federally insured financial institutions who primarily dealt with consumer savings, Mortgages and Personal Loans. What an interesting  concept, get the mortgage business away from commercial lending where one doesn't influence the other and people have a vehicle to save real money again, what do you think?

I am concerned about housing having the impact it has had in the past on a recovery this time around. I think it might get started, but run out of gas before it can have the impact we need to have the econmic explosion we need as in past recoveries. That said I do believe there is a solution, its one that is going to require the financial industry to roll up their sleeves throw out some of their rules and add a few others, if they do it right it WILL bring about recovery across the economy, thats another post. 

WAKE UP REALTORS

Realtors and Economic Recovery

As I peruse the emails coming to my inbox from all of the people trying to sell me the magic solution to riches I begin to understand why we as Realtors are considered a less than professional industry. The biggest offering today is “How to make a fortune off of people who are losing their houses” i.e. short sales, pre-foreclosure, foreclosures, bankruptcies and the list goes on.

In today’s uncertain economic times it seems to me that we should be thinking more about what role can we play in providing a viable solution or solutions to the uncertain economic times in our country. History shows that the real estate industry has often brought our economy out of economic downturns due to the huge impact it has on providing jobs and generating a strong after closing economy because of increased retail sales at a number of levels, furniture, landscaping, painting, decorating, home improvements and the list goes on. It seems like our Associations, NAR, State Boards and Local Boards should develop task forces that will be working hard to develop strategies that will provide positive ways to help Real Estate recover at the national, state and local levels. You know I should have said that the other way around, “At the Local, State and National level”, because the approach needs to be bottom up rather than top down to be totally effective.

As I look at the short-sale, foreclosure, bankruptcy market it becomes pretty clear, if someone doesn’t start trying to solve it rather than make a killing off it we will never see an economic recovery. These two approaches, lets just call them “Economy Killers” for the rest of this discussion, from a lenders standpoint are the same as they have always been and they are outdated. We have more and are creating more vacancies in the housing market than I have ever seen in my 36 years in the real estate industry. Look at what is happening, people are being pushed out of their homes in record numbers and then told they have to sit on the sidelines for the next 2,5,7 years before the lending industry will “let” them buy a home or have credit again. So a large part of the population that have been homeowners are taken out of the equation for recovery. As more foreclosures and short sales take place its like building a snowman, you start to roll out the first ball of snow and it starts getting larger faster and faster as it gets bigger, this is what is happening in our real estate economy because of Economy Killers as more come into the market they drive prices and values down even further causing local values to go down, causing more people to become affected by the declining values bringing more people into a short sale or foreclosure situation causing further declines and so on and so on and so on!!! Ooopps now our get rich Economy Killers have totally denigrated the housing market leaving a bunch of vacancies, a huge supply of potential homeowners who have to sit on the sidelines for a number of years deflated home values and now the recovery we have counted on in the past will never get off of the ground because there aren’t enough buyers to make an impact and more importantly there is no “push” up in the market because all of the vacancies are dead end deals rather than creating a push which in the past has counted for anywhere from 2 to maybe six or seven upward sales!

If we want to be thought of as Professionals, maybe we should start asking the serious questions, what can we do to help this industry turn our economy around, how can we stop this downward spiral of property values, how can we stabilize home values, what can we do to contribute to a plan that will allow the real estate industry to do what it has done so successfully in the past, bring our economy out of decline into recovery and stability? Let the discussions/actions begin….

The Third Real Estate Market!

What is the Third Real Estate Market?

The Seller/Buyer Market.

The tightening of a real estate market creates an opportunity for homeowners who have 1- Been thinking about making an upward move and 2- has lived in their home on or before the first year of the recent real estate expansion. An example, your local market became a Seller's market 4 years ago and you either bought in the first year or didn't sell during the Sellers market cycle, the market has now tightened to a buyers market and pricing are in decline or have declined.

This seller has to overcome some issues about the immediate market area to make this market condition work to their advantage. First they have to "get over" the fact the their neighbors 2 doors down or on the next street sold their homes for a lot more, one, two three years ago. The next condition of being a Seller/Buyer is, the move you make most be upward ( I've had several people contact me in the past few months wanting to cash out and downsize, I've suggested that if they don't have to move, they should wait the market out until it becomes more of a sellers market, because this is all about leveraging). There I've said it, this Seller/Buyer Market is about leveraging, it causes the seller to sell in a down market, not making as much as they might have in the previous seller's market but gives them the advantage of buying in the lower market and being "positioned" to take advantage of the next upswing in future markets. Equity build up is all about percentages so if you sell a home at 200,000.00 and buy at 300,000.00, 5% appreciation on the 300,000 is $15,000.00 vs $200,000.00 which is $10,000.00 a 33% increase in dollar equity. 

Some people will say "what if the market doesn't recover"? Well if real estate doesn't recover then I would question that an economy would recover so would it matter? In the 35 years I have been in the real estate industry, real estate always seems to lead a down economy to recovery because it creates more jobs in more industries.

So if you are a homeowner that fits this profile is it time to make that move, if in St Louis give me an email and lets talk?!