So the Sun is shining.. the world is turning and banks are still lending money, and people are still spending. The difference today is that people are being much more discretionary and careful with spending. Not such a bad decision.
You know, I used to *whine* to my kids about spending gone wild. Now that one is on her own, gainfully employed and supporting herself, all of a sudden the meaning of “support” has sunk in. I feel like I’m turning into my mama and am waiting for the “I told you so!” to come out of my mouth! Restraint,… slight grin.
This week at the Tallahassee Board of Realtors marketing meeting, our Board attorney gave us the monthly legal update. Always packed with knowledge and useful information, always timely and purposeful. I walked away thinking of a few comments that were made and with three thought provoking points that were discussed on my mind:
#1 “This is the worst real estate market I have seen since 1969”
Maybe,.. I was born in 1961, so it is hard for me to remember back that far! ; ) In any case.. my earliest memories are this..my father helped build our home. I mean, he swung a hammer, he cleared the property, he toiled every spare moment after his job to build a home for my family. He saved money for a down-payment of 25%. Yes, that is right, 25%… no FHA loans for 3.5% down, no 100% financing. Banks were different then? The truth is, home buyers were different then! My parents still reside in that house, they have loved and maintained it, and it is in much better condition than many 3 – 4 yr. old homes that I show on a regular basis, and certainly cleaner. Pride.
The following data comes from the closing statement, on file in the house. Their interest rate in 1967, 6.6%. The purchase loan was $27,500 – not including the $3500 land purchase. My dad’s Salary,..$15,000 Feeding and clothing a family of 5. Their debt to income ratio,..54%. Their closing costs, 3.6% of the Sales Price. Accomplishment.
#2 “Real estate is local”
Boy is it ever.. not just from state to state.. but city to city sometimes, street to street. Striving for appraisal standards, chunk the short sale and foreclosures out of the appraisals is something we are working on. The analogy to me is this:
If you go into a retail store, you see two areas.. the sale racks and the new season’s latest collection. Just because there is a shirt on sale do we think we can expect the value of the new collection to go down? It is after all a “declining” market,.. retailers should be happy to get any offer on that item, right? Haha! Try running that by the sales clerk or even the store manager! So, the point is,.. don’t expect the perfect condition, loved home and faithful homeowner to be thrilled with an offer anywhere close to a run down, dilapidated foreclosure. Common Sense. Get away from what appraisers are doing to our market.. and look at the home as your home. How much is that worth to you? Will your family be happy there in 5 years? Yes.. at least 5 years! (a good Realtor’s advice)
#3 “Real estate has never experienced overnight losses of over 30% like the stock market!”
So I suppose we should shut up..quit complaining, give a quick pat on the back.. and learn to love our jobs and ourselves once again. We are not responsible for the market collapse. It seems ironic that the Realtors I know are working 60 -100 hour work-weeks and keeping families together, restoring dignity to those who have lost hope, and stimulating an economic recovery. Realtors don’t punch clocks. Perhaps if they did, the public would understand the hours that go into our jobs. Realtors have it harder than most actually. We are self-employed 100% commission, all business expenses, taxes and continuing education come from that commission. We will recover, we will work to recover and we will support one another through this market, because… We Care.
Help us help you! Turn the TV off.. take in the big picture, think locally, save money, live within your means and most importantly, Hire a Professional Realtor.
I don’t think realtors are to blame either, it was the fault of greedy bankers turning a blind eye to what was clearly a risky strategy in order to collect their bonuses.
A lot of people in related industries are getting the flak for their gross errors and they are still whining that they should get their bonuses. Wake up and smell the coffee Mr Banker you get bonuse for a job well done!!!