Dictionary.com describes schizo-phrenic as;
2. a state characterized by the coexistence of contradictory or incompatible elements.
Frankly, I think our current real estate market here in the greater Kansas City area fits that definition about perfectly. Nearly every day people call or email me to ask me what I think of our current real estate market. On some days I think “Hey! It’s not too bad.” On other I think “Is this ever going to end?”
Proof of Recovery
My office, Keller Williams Realty, Diamond Partners, Inc of Olathe, Kansas has had two record months very recently. I believe I was told that June and August were the best June and August months we’ve ever had. (Keeping in mind our office got started in 2003.) Personally, my June kicked hiney and July wasn’t too shabby. Olathe housing inventories have been down a little and DOM seems to be holding steady after having dropped a bit.
Proof of Lingering Slump
It’s all around. While many agents are keeping up or dipping only slightly from previous highs most have seen at least a 10% – 15% dip in sales volume from 2007. A great many of the agents that are still in the profession will quietly whisper that they are down 20% – 25% from 2006. I don’t know about you, but if your income took a prolonged 20% hit when would your spending habits and lifestyle have to change? Over 3,000 agents have fallen off the MLS rolls and more are expected to fall off this renewal season. I’ve heard the local builder’s association rolls have been devastated.
Forget housing starts, equity statistics and talking heads. Look at the incomes and sales volumes of your local real estate agents. If the amount of agents is going up and their incomes are even or going up you have a good housing market. And the opposite is true if all that is dropping. We can bend statistics (politicians, CNN and Fox are masters of this) all we want. But if people are or are not earning a living in real estate then there is your answer.
A Last Word About This Administration’s First Time Home Buyer Credit
While the first time home buyer’s credit has been an excellent resource for a great many people…and I have helped five different home buyers take advantage of the credit…I still don’t like it.
First, four of those people would have bought a home anyway. So there is money that didn’t have to be given away. Second, I believe it provided a false bounce to the market by accelerating the purchasing time frame of a great many people so as to not miss the arbitrary deadline of November 30, 2009. Now they want to extend it. But realtors I know here in Olathe aren’t finding very many takers. I believe you have taken current and future home buyers out of the market for at least the next six months. Extending the credit will not magically provide us with new home buyers that are credit worthy.
What to Expect?
Listen, the sky has shaken but it hasn’t fallen. I still believe 100% in the long term value of real estate. But the dips hurt, no doubt. For me, an average guy with an average income in an average city in the middle of the country, to sit here and give you answers would be folly. I suspect, however, more of the same. First we heard this would end in the latter part of 2008. Then the Summer of 2009. Now I’m hearing recovery is just around the corner in 2010…but maybe the last quarter.
I wouldn’t necessarily count on it. This could linger. Our houses are no longer just easily accessible piggy banks. You have to use good sense. Move when you need to. And most of all, look at your local market independently of even your city or state. As always, real estate is very local.