Real Estate Neophytes
Last night I attended a group gathering with a boating club we belong to. It was a very interesting experience to say the least, when the conversation turned to the state of the Real Estate market.
Almost all of the people at the gathering have no experience in the Real estate industry. At most they own one or two homes. Yet when they ask my opinion of the Real Estate market several became belligerent when I shared my thoughts and told me I had no idea what I was talking about.
Not to toot my own horn, but I own 3 waterfront homes in Florida, and a large commercial building in the downtown area. We just recently sold a fourth home. I own a National Real Estate firm that operates in 14 states, has 500 Realtors and this year will do approximately 4,500 sales for close to $1 billion in volume. Prior to this I owned a large 6 office Prudential franchise with 200 Realtors that did $300 million in volume per year that I sold at the peak of the market five years ago. So I have just a little expertise. I use to write a local weekly newspaper article on the industry, so most of these people at the gathering know me as a Real Estate guy.
So last night obviously several of them wanted to know what I think of the Real Estate market. I told them that I want to buy more Real Estate right now. In fact I want to buy as much as my wife will let me. The response from them was “Are you nuts”?
I politely gave them the reasons I believe the Real Estate industry is poised for a dramatic comeback once our esteemed leaders in Washington get their act together and balance the budget. Once our economy is healthy again; I believe we will see rapidly rising prices.
For over two years now the media keeps talking about the shadow inventory that has not materialized on the market. The Realtors keep looking for the shadow inventory listings, which have failed to materialize.
I believe that the people that lost their homes because they got in over their heads have washed through the system. The current homes that are delinquent are people desperately trying to hang on to their homes or the people that have chosen to walk away because of the loss of value. As a result I do not see this huge catastrophe on the horizon that the media talking heads keep yammering on about.
Even in these horrid economic times, our country continues to grow by 9 million people a year. We have had almost no new construction in the last 5 years, and affordability is at an all time high. On top of all that the inventory of homes for sale in this country has dropped from almost 2 years worth of inventory to 7 months inventory nationally. Anyone in our industry knows that as soon as we near a 4% inventory level, the Real Estate market become a seller’s market.
So in the last 2 years we have dropped from a 2 year inventory level to a 7 month inventory level. Is there any reason to believe that we won’t continue to see inventory levels drop if our economy continues to improve?
So that is why I want to buy Real Estate right now. I would not be at all surprised to see double digit appreciation within the next 2 years if our economy improves and Washington gets their act together.
Negotiating Tip 114: Retreat Negotiations
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Negotiating Tip 113: Activating Our Opponent
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Negotiating Tip 112: Misconceptions
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