What’s next for housing?
As the housing market continues to slow, we are left to wonder what is going to happen next.
Many people are predicting that our slowing sales are going to plummet, right along with the housing prices. Others are taking a more optimistic approach, and are thinking that the market will come to a “soft landing.”
But in the end, no one will really know what is going to happen, until it does, and the figures and data will show whatever does end up happening.
Everyone has there theories on the current state of our housing market, as well as the future of it, including the president of the biggest real estate sales company in the United States.
An October 3, 2006 article by Daniel McGinn of Newsweek, “Are there blue skies ahead,” outlines an interview with Century 21’s CEO, Tom Kunz, and his thoughts on our ever-changing housing market.
Sales have slowed and prices are starting to drop, and this has caused real estate agents to adapt to the changing market.
“There's no popping sound—not yet anyway. But for doomsayers who've been worried about a housing bubble, data released last week brought long-awaited news: after months of slowing sales, in August the median existing home price fell by 1.7 percent, the first year-over-year price drop in more than a decade. The number of homes on the market jumped to 3.9 million—the highest inventory level since 1993.”
Kunz is optimistic about the outlook of the market, although he has acknowledged a slowdown. He says that our strong economy will help us in the long run, and he has prepared his agents for this long awaited cooling phase.
“First, let me say we still have a fairly strong market. Jobs, income and interest rates are in great shape. The forecasts say this will still be the third-best year for home sales in history. But inventories have moved up, which is why we've reminded our agents how to properly price a home, how to market a property and how to make it stand out.”
One of the problems in today’s marketplace is that many people who are looking to sell their home are not prepared to make the necessary adjustments required in a slow market, such as lowering the price.
“It takes time for buyers to understand they don't have to act so fast and for sellers to understand that pricing is not what it used to be. The real price of your home is what somebody is willing to pay for it—that's the bottom line. A lot of times people look at this and say, "I'm losing all this money," but until you sell the property you haven't lost anything, even though they saw that paper equity sitting out there. The reality is you have to deal with what you bought it for and what you're going to sell it for at the time you want to sell it—you can't look at what [you] may have missed out on.”
Another problem is that many people are worried that there are way too many real estate agents looking for work in this slowing market, which could lead to cases of fraud and deceit, due to increased competition. Kunz was unsure if there were too many agents in general and at Century 21.
“The issue with too many agents has to deal with the level of expertise they have. As the market starts to fall ... there will be people who get out. But we continue to recruit agents. We average about 7,000 to 9,000 inquiries a month on our Web site from people who say they're interested in a career in real estate.”
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