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Gotta love that media spin

This past week our listings saw an average of about 2 showings each.   That’s about on track with this same time last year.   This year, traffic doesn’t see to be the issue, but rather it is offer activity that seems to be slower than usual.   Although, things do seem to be picking up some and I’m certain that the second half of this year will be stronger for sales than the first half has been.   And of course, relative to the same time last year, the second half of 2011 should be a big improvement.

Even though the media is ‘required’ to put a negative spin on market news to get ratings, even the media is beginning to recognize the opportunity that today’s market presents for buyers.   Check out this article that I read at MarketWatch.com called ‘Housing crash is getting worse’.   The first page of the article is an amazing spread of gloom and doom.   BUT, when you get to the second page the journalist goes on to explain that he has become bullish on real estate for a variety of reasons.   (Cheap prices, great deals, cheaper to buy than to rent, and low interest rates).   Its almost too good to be true and it seems the general public is living that cliche.   I’ve been talking about that here in this blog for months!

Its likely that most people won’t read the whole article but will skim the first page for the synopsis and then move on.    Those skimmers will miss the part where the journalist  outlines the reasons why now is the time to get back into real estate.   So is this guy just looking for ratings?   Or does he want the masses to continue to believe the gloom and doom so he can profit while you miss out?

There is definitely opportunity out there.   Its a buyers market baby, and oh what a buyers market it is.

1 comment

  1. Rob

    I really enjoyed this blog entry. As your biggest blog fan, I think that guy from the WSJ hit it right on the head. To me the market is starting to make more sense. It is fundamentally fractured- especially if over 1/3 of sales are coming from foreclosures and short sales. Let me attempt to explain.

    Banks have no use for property, but actual owners do. The banks’ lack of utility for the home in favor of cash(principal recapture) is actually driving the market. Let’s say the average price for a foreclosure/ short sale is $125k right now. That factors in the units that have significant rehab involved due to disgruntled former owners tearing up fixtures on their way to eviction. And distressed currently makes up 37% of all pre-owned sales.

    If that is true- then to get to an average of $164k, non-distressed sales are going for an average of $186k. THAT IS 49% HIGHER THAN DISTRESSED. Now, my estimate may be a little wider than what is actually happening, but fundamentally explains the current buyer/seller expectation gap. It is also only exacerbated by the switch by appraisers to lean to the lowest common denominator (most conservative) instead of the highest(most aggressive) as they were a couple of years back, and worsened by the lack of banks providing investor financing to help create more demand and clean up the foreclosure end of the barbell.

    It also explains the vulture market we were contemplating a couple of weeks ago. When a non-distressed seller grows so tired of having their house tromped through by strangers or has a burning desire to turn their house quickly and prices a nice, move in ready house at or below the current “average”, people jump all over it. Because in reality, the current average is probably 10-12% lower than it should be due to the foreclosures.

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