Seeing is believing
In high school I took a lot of science courses and
intended to become a zoologist. Those courses taught me the discipline of asking
questions, testing theories and drawing conclusions based on experiments that
produced results. Those skills formed a foundation for decision making and
observation that have proved very helpful in my career as a real estate
professional.
Contrary to popular opinion, the real estate market has
been slowing i.e. declining since late 2005, not just since 2008. How do we
know? At that time, builders began to change their contracts to include certain
provisions if the buyer was an investor because investors were buying new homes
at pre-construction prices and putting them back on the market at or before
closing. Oftentimes these brand new homes were at lower prices than the builder
was currently selling. This process became know as “flipping” and caused a false
spike in the market. The homes being sold were not being sold to real owners,
but investors who were competing with the same builders who had sold to them in
the first place.
Once builders slowed down the process of selling to
investors, the market began the lengthy process of absorbing the excess
inventory of homes and condos brought into the market during this false boom.
This excessive inventory caused prices to fall simply due to the natural law of
supply and demand. Many of these excess properties went into foreclosure and
short sale status because there were simply not enough buyers for all of them.
This caused buyers to become confused over pricing or they were financially
paralyzed because they, too, had properties to sell before they could buy. Many
communities became falsely stigmatized because of their large inventory of
available properties.
There are a lot of rumors circulating about what, when
and how to buy at the best possible price. Understand that the real estate
market is a living organism – it changes every time something is bought and
sold. Its fluid and changes with the financial wind, public attitudes and
natural world conditions like hurricanes and floods. However, in 2009, buyers
are finding that just because a property has been on the market for 12 months
does not mean it will still be there next week. Some buyers are now finding
themselves in multiple offer situations again for the best deals. We’re seeing
buyers get great deals; some of those deals are at 2003 prices.
Get current data, use your powers of observation,
compare and make a great real estate buying decision today. Just remember that
everyone knows as much as you do about the market. If you see a great property
at a great price, other people have seen it too. The public is finding them and
showing up to buy them. Seeing is believing and we believe the market has
turned.