Look out, the dollar is falling. The dollar is falling.
OK, this is not Chicken Little; but, the economists are saying the dollar has been sliding the last two years and will continue to fall through the remainder of 2011. Yikes! Should I say – let's look out for inflation?
So what does this mean for the real estate market?
There will be more investors in the market this year with home prices so low and the "cost" (a.k.a mortgage loan) of the American dollar so cheap. How does this affect the consumer? If you are an investor, it is a field day for you.
However, this is not good for those who want to be home owners and not landlords. With the dollar weakening, potential home owners are worried about the basic needs of groceries and transportation over home ownership. There needs to be a strengthening of the dollar so we can get back to a stable real estate environment. There also needs to be a strengthening of the American image and the ideals that encourage home ownership.
When I first read USA Today's Housing Crash slows in 6 cities: What the bottom looks like, my first reaction was of elation. Finally, some good news! But, then I attended the Short Sales class presented by J. Scott Stevenson, Esq. from Northwest Title and that presentation changed my perception of the situation. Below are 2 charts that I find are the most telling of the situation we are in currently.
Loan Reset Chart
Yes, we are out of the subprime issues; however, there are more coming down the pike. The graphic on the right (Loan Reset Chart) illustrates where we are on the types of loans that were issued and now are causing problems in 2011. This chart demonstrates that the subprime market is pretty much past us as foreclosure issues; but, the Option Arm is going to give us fits for the rest of 2011 and into 2012. From my understanding, Option Arms were targeted at homes that are $250k and above. So while the subprime market ($249k and under) has slowed down on the foreclosure, there will be trouble ahead in the more expensive home arena.
Delinquency Rates 9/2010
If you look at the chart labeled Delinquency Rates 9/2010, you will see that Ohio and more specifically Central Ohio has a rate of 7-11%. Just because we fall in the "middle" column, does not mean we are out of the woods. It will take several years to get us out of the woods.
Hold tight. The rollercoaster is going up another hill.
Preparing for a listing appointment made me think: "Why is it called a Listing Appointment?"
I do not know how many times I get the impression that sellers think that I will have hordes of buyers in my database to sell their house. Wait a second, I do. It is called the Multiple Listing System (MLS). Yep, the one or two buyers that I may have pale in comparison to the 1 or 2 buyers that the other 6,000 or so Realtors have who pay good money to subscribe to the MLS in Columbus, Ohio.
A listing appointment is how we are going to go about attracting the attention of the buyer (and their Realtors) who are or will be in the market for your property. Now, how I am going to "sell" the property to a buyer that I have in my back pocket? The chances that I may have a specific buyer that is attracted to your home and can afford the home is very, very slim. The MLS however, has a greater chance of finding that buyer than I could ever personally have.
It takes some creativity and time to ist a home correctly and cooperation from the seller too. I have to sell the MLS as THE absolute best place to have a listing. It is truly about the MLS to sell a home. Everything else is a great way for the Realtor to attract new clients. I know the perception of the Real Estate industry is about our marketing prowess on homes. Let's take it a step further. It is not our general marketing prowess that sells your home. It is our marketing prowess on the MLS that sells your home.