Are We There Yet?
Strong evidence that the market has bottomed and that a more balanced housing market is emerging in many parts of the U.S. can be found in the latest HouseHunt Current Market Conditions survey data reported during the first quarter of 2010. Although uneven, the results show prices have stabilized after steep declines over the past two to four years and in some cases are actually appreciating despite the drag of foreclosures, short sales, job uncertainties and reluctant lenders.
Perhaps the most positive news is that the buyer-seller ratio is almost dead even in HouseHunt's national random survey of member-agents. Also important, repeat buyers now represent 50% of all transactions with first-time buyers when investors are factored into the equation. Three months ago, repeat buyers accounted for only 34% of home purchases. The normal ratio is two-thirds repeat buyers.
Improvement is also seen in the average time needed to sell a home. Fifty-two percent of HouseHunt's member-agents report that their customers received 95 to 100% of their asking prices. Another 35% said they received more than 90%.
"From the member-agents I talk to, there seems to be a sense the market has hit bottom and sales activity is continuing to pick up," observes Michael Bearden, president and CEO of HouseHunt, Inc. "Business is by no means easy but is getting better and more reliable. Our lead flow remains good with plenty of interest in real estate. Consumer demand is building, especially from repeat and move-up buyers. The federal $8,000 and $6,000 first-time buyer tax credits approved by Congress last year were strong motivators for fence-sitters to do something. Any increase in current mortgage interest rates could stimulate additional buyer activity this summer and fall."
When individual member-agents were asked if the housing market has bottomed in their communities, their opinions ranged from "yes" to a flat "no." A majority of them agreed that more personal contact with customers is needed, both by phone and by e-mail, to meet changing market demands. Here's a sampling:
"I'm definitely trying to spend more time being in touch with my customers," said Steve Hinrichs of Edina Realty, who with his partner Jean O'Reilly are exclusive HouseHunt member-agents for Maple Grove and Rogers, MN, in the suburban Minneapolis area. "I'm currently offering to update my customers on a monthly or quarterly basis on homes that have sold in their communities. It keeps me in front of them and allows me to see what is going on in their areas. As far as local market activity, our focus has been on first-time buyers. We're seeing a little price growth in some areas but will know better in a month or two. Our market will come back. Our biggest problem right now is consumer confidence. People are nervous and unsure about their jobs and the economy. I try to be honest and forthright with them. Trust is of utmost importance now."
Geri Boyer of Altura Real Estate Group, exclusive HouseHunt member-agent for Laguna Beach, CA, said she is seeing a stabilization of prices but expects a little more price dropping through the end of the year. "The activity is out there," she said, "but our biggest problem is getting loans for my buyers. Competition from second home buyers and investors is also keen for properties in the $350,000 range. Recently, I had a listing on a bank-owned property that attracted 33 offers. It sold for $100,000 over the list price. First-time buyers are being outbid by investors with cash." Boyer added: "I'm doing everything different to compete in this market. I've had to reinvent myself."
Dealing with the lenders is also a big problem for Alexia Gallagher of Keller Williams Realty Atlanta Partners, exclusive HouseHunt member-agent with her husband, Bill, for Suwanee, South Forsyth County and Cumming, GA. "The majority of buyers who come to us are looking for deals, so we're looking at foreclosures, short sales and distressed properties. Our biggest problem is getting banks to be reasonable and to get them to respond in a timely manner. We have been in multiple bidding wars. It's a different market." She noted: "I think as far as value goes, we probably have bottomed out price-wise. Our inventory of unsold homes is down quite a bit, which is very good. We've had a surplus of inventory with lots of new construction. We continue to have a record number of foreclosures as well. So we have a mixed market with some positive signs and some negative signs."
Not convinced that the housing market has bottomed is Barry Newman of CENTURY 21 M.B. in Glenview, IL, exclusive HouseHunt member-agent for Deerfield, Highland Park, Northbrook, Northfield and Glenview in suburban Chicago. "I feel that we're over-inventoried. I also have a hard time believing that there are as many buyers as sellers out there. I had a great December and January, then things started to dry up, which was disappointing." Newman continued: "One thing I am doing to be more effective in this market is to talk more with my customers rather than e-mail them. I now see that talking directly to people is the best way to go. It's better to be in front of your customers than communicating the way I have been doing."
Hinrichs, O'Reilly, Boyer, Alexia and Bill Gallagher, and Newman are newly inducted members of the HouseHunt National Hall of Fame. To qualify, they had to close a minimum of $500,000 in cumulative commissions and/or a minimum 100 transaction sides in HouseHunt-related business over a five-year period.
HouseHunt, Inc., is a consumer-oriented Internet firm that provides free information and services to homeowners, home buyers and home sellers in 47 states through its member-agents and through its primary web site, HouseHunt.com.
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