What's next for housing?
By Melissa Wirkus
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.”