In their most recent web-blog, Zillow released their predictions about the housing market throughout this year. The headline read, "First Quarter Brings More Dismal News For Housing Market." Well, with that headline you can guess where the article went. http://www.zillow.com/blog/2011-05-08/first-quarter-brings-more-dismal-news-for-housing-market-publish-sun-901-p-m/
Zillow is not looking for a market turn-around until 2012 with the possibility of a property value loss of 1% per month throughout this year. With the market already 
down nearly 30% in the past three years another 12% is going to put a lot of homeowners upside down.
So, you ask yourself, "Is this good news?" It depends. As a realtor, I have to look at the market from two angles, up or down. For decades I've been an aggressive stock market investor. I get just as many opportunitis when the market decreases as when it increases. All a declining stock market tells me is that I need to change my approach to picking stocks. I may short sell rather buy long in a particular market, or I may play it the other way around. The market determines the play.
The same is true in real estate. Declining markets affect Realtors and real estate in unique ways. They cause part-time Realtors to drop out of the business. That's good for those of us who actually make a living selling real estate. Challenging markets like the one we're in will run unsophisticated Realtors out of the market. Great! More for those of us who have kept up on the markets, the news, up to date education and how-tos of dealing with a difficult market. I've watched a lot of good people leave this profession in the last four to five years. I'm sad to see them go, but they should have gone. That's not being mean. Who would want a part-time neuro-surgeon working on their brain? The same is true in our profession. When down markets shake unproductive Realtors out of the business it helps unclog the pipeline between people who need to sell, or need to buy, and professionals who really know what they're doing.
Markets like this one, and news like we received from Zillow, help us adjust to 
better serve our clients. If we have clients who have been thinking of selling, but they've been waiting for a bump in the market, now might be the time to sell before they lose any more equity. For the client who wants to buy, but needs a little more money before jumping in, this might be a good time to encourage them to sit on the sidelines for a little while. You might advise them to save some money, and see if prices drop further. 
They might not need as much money as they think.
For the person who is upside-down and needs a short sale the Zillow article might convince the lender to let them lower their price to a sell-able level before the property is worth 10-15% less and everybody loses more. For the wise investor, the article is a negotiating tool to help him buy property at a discount before the buyer is forced into a discount by default.
News can be a glass half full or half empty. If you have marketing 
skills that will work in a down economy you simply adjust when the markets go down and change your tactics. You may even adjust to a new clientele for that period. If you have a marketing plan for a roaring economy you make hay while the sun is shining and squirrel away resources because as surely as a market flies it also crashes. Adjust, adjust, adjust. Be flexible for "Blessed are the flexible for they shall not break!"
Comments