Taking Advantage of the Advantage

Housing markets are turning around all across the country. The way this is measured is first through pending sales and then the following closed sales. By the time the national numbers turned, the recovery had already been happening for months.

Albuquerque is one such city. Prices are still down from last year, but they are now leveling out at around $180,000 (for about 8 months now). The pendings have been increasing for months and now the closed sales are following suit. The same is true for cities such as Las Vegas, Washington DC, Miami, and others.

Are you taking advantage of this advantage as a sales person? Are you getting the word out to your local sphere about what's happening in the local market place?

The recovery has happened, predictably, in two fashions in the favor of buyers.

1 - While prices dipped, buyers could have named their price and received thousands of dollars back from the seller to buy their home.

We had a phrase of -- "what would be the price you just couldn't walk away from" on this house. The buyer would look it over and say -- "Well -- if it was $25,000 less, I would buy it." So that's what we'd offer - and that's what they would get. While the market continued it's slide, buyers got ahead of the drop and "stole" houses all over the country. To the shagrin of banks and owners, the buyers pulled in discounts in the hundreds of thousands. The agents who knew how to forecast that drop, helped buyers save a ton of money and made good incomes through the process.

2 - The cost of money kept dropping and then Uncle Sam started throwing in money to boost morale and buyer interest.

In the home-purchase process, buyers have to buy two huge commodities -- the house - of course, everyone knows that. They keep waiting for the price to drop to the bottom and THEN jump in and buy. But you have to also look at that second product - the money.

The cost of money is measured in the interest rate and the points paid for such interest rates. This year, buyers have picked up money for interest rates as low as 4% - those are rates that my grandparents never saw!

So we have low prices and low interest rates. Did you pick up on that as the sales pro? More importantly - did you get your buyers on board and off the fence?

If you wanted to have predicted the come-back, then a look at sales on a state-by-state level would have been a good place to start. The media looks only at price. A very foolish move. A recovery begins when the buyers return - much sooner than when prices start upward.

On this table from Realtor.org you can see that the hardest hit states (California, Nevada, Arizona, Florida, Virginia) have now had the best quarters (up 100%+ in some markets).

Yea - we hit the bottom alright. Get ready for the bounce.