Changing Importance of Realtors
Remember the stock market of the 1990's? The exuberance Greenspan stated over and over again that could not be sustained? He was right as we watched trillions of dollars evaporate when tech stocks returned to reality, exuberance gone.
Welcome to the 2000's when the exuberance switched to real estate. From about 2002 through 2005 prices climbed on record low interest rates, and record demand. After all, just about everyone could afford to buy a home, and the rate of home ownership climbed to an all time high.
Welcome to 2006 with interest rates at 4 year highs, an over supply of homes for sale, new and existing, and you see the exuberance evaporating. This in spite of record sales being reported with new home sales up 13%, however at lower prices.
Are we in a bad real estate market? Absolutely not. We are in the most competitive market since the double digit interest rate era of the 1980's. We have returned to a normal demand situation, while the inventory of homes for sale are at record levels. In other words we are still selling record numbers of homes, however at a rate that will only absorb half the available properties for sale. Some will win, some will lose. We call this capitalism.
An independent study commissioned by RE/MAX International had some interesting results: in 2003 24% of homes sold were by owner; in 2004 18%; and in 2005 12%. Makes sense when you look at market conditions by year, with demand outpacing the supply. There were simply more buyers than sellers in the market making selling a relatively easy proposition. Not anymore.
Thus the renewed appreciation for Realtors, and the service Realtors provide in matching the remaining buyers in the market to the best home listings. The home seller of 2006 should be aware that back in the glory days of 2002 through 2005 it was also easier for Realtors to sell homes than today. The point is you need to be careful on selecting an agent and company in tougher, more competitive markets. The cream always rises to the top during tough markets, many companies that have success in hot markets, don't realize the same success in tough markets.
In the Springfield Illinois market homes continue to sell at a record pace while experiencing the largest number of home listings for sale in history. In this mid sized market the local MLS has 1525 homes listed for sale, in 2005 there were 1337 listed, and in 2004 only 1106; that's an increase of 419 or 38% in just two years. For the first time in six years the pace of home listings being sold pending have fallen behind the previous year's for 3 consecutive weeks. One in 3.75 listings have sold and closed through the first four months of 2006, and for every home closing two new listings are added to the inventory.
If you will be selling in 2006 interview two to three agents from different companies. Look very closely at the success they have had in 2006, that will tell you a lot about their services, and how effective those services are in tough markets for sellers.
An example of the cream rising to the top in the Springfield market is RE/MAX Professionals. Residential sales for RE/MAX are up YTD by 16% in transactions, and 23% in dollar volume closed with an astounding 29.65% market share. In Springfield there are the Big Three and the rest. Both numbers 2 & 3 have seen their sales slip from last year with number 2 posting a 10.92% market share, and number 3 an 8.4% market share. The fact is the local RE/MAX franchise has outsold the next five top producing companies combined. Information that should be important if you are needing to sell in this changed market.
Now in my 20th year of service as a Realtor, my advice is that wherever you live, don't fall for the myth that agents and companies are interchangeable. They are not. One of the biggest mistakes consumers make is believing agents all provide the same service, produce the same results, and all operate with the same ethics. Wrong on all counts.
About half the home listings in the Springfield market are projected to sell this year. Some will win, some will lose. Who do you think has the better chance of winning? The family that realizes agents are not interchangeable, or the family that doesn't even think about it? If you are going to sell this year, best wishes on selecting the best agent and company, because that will determine the outcome for you.
Welcome to the 2000's when the exuberance switched to real estate. From about 2002 through 2005 prices climbed on record low interest rates, and record demand. After all, just about everyone could afford to buy a home, and the rate of home ownership climbed to an all time high.
Welcome to 2006 with interest rates at 4 year highs, an over supply of homes for sale, new and existing, and you see the exuberance evaporating. This in spite of record sales being reported with new home sales up 13%, however at lower prices.
Are we in a bad real estate market? Absolutely not. We are in the most competitive market since the double digit interest rate era of the 1980's. We have returned to a normal demand situation, while the inventory of homes for sale are at record levels. In other words we are still selling record numbers of homes, however at a rate that will only absorb half the available properties for sale. Some will win, some will lose. We call this capitalism.
An independent study commissioned by RE/MAX International had some interesting results: in 2003 24% of homes sold were by owner; in 2004 18%; and in 2005 12%. Makes sense when you look at market conditions by year, with demand outpacing the supply. There were simply more buyers than sellers in the market making selling a relatively easy proposition. Not anymore.
Thus the renewed appreciation for Realtors, and the service Realtors provide in matching the remaining buyers in the market to the best home listings. The home seller of 2006 should be aware that back in the glory days of 2002 through 2005 it was also easier for Realtors to sell homes than today. The point is you need to be careful on selecting an agent and company in tougher, more competitive markets. The cream always rises to the top during tough markets, many companies that have success in hot markets, don't realize the same success in tough markets.
In the Springfield Illinois market homes continue to sell at a record pace while experiencing the largest number of home listings for sale in history. In this mid sized market the local MLS has 1525 homes listed for sale, in 2005 there were 1337 listed, and in 2004 only 1106; that's an increase of 419 or 38% in just two years. For the first time in six years the pace of home listings being sold pending have fallen behind the previous year's for 3 consecutive weeks. One in 3.75 listings have sold and closed through the first four months of 2006, and for every home closing two new listings are added to the inventory.
If you will be selling in 2006 interview two to three agents from different companies. Look very closely at the success they have had in 2006, that will tell you a lot about their services, and how effective those services are in tough markets for sellers.
An example of the cream rising to the top in the Springfield market is RE/MAX Professionals. Residential sales for RE/MAX are up YTD by 16% in transactions, and 23% in dollar volume closed with an astounding 29.65% market share. In Springfield there are the Big Three and the rest. Both numbers 2 & 3 have seen their sales slip from last year with number 2 posting a 10.92% market share, and number 3 an 8.4% market share. The fact is the local RE/MAX franchise has outsold the next five top producing companies combined. Information that should be important if you are needing to sell in this changed market.
Now in my 20th year of service as a Realtor, my advice is that wherever you live, don't fall for the myth that agents and companies are interchangeable. They are not. One of the biggest mistakes consumers make is believing agents all provide the same service, produce the same results, and all operate with the same ethics. Wrong on all counts.
About half the home listings in the Springfield market are projected to sell this year. Some will win, some will lose. Who do you think has the better chance of winning? The family that realizes agents are not interchangeable, or the family that doesn't even think about it? If you are going to sell this year, best wishes on selecting the best agent and company, because that will determine the outcome for you.
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