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As printed in the OC Register / Saddleback Valley NewsWritten by Jim E. Flynn, Century 21 Beachside Realtors, Lake Mission Viejo
July 7, 2008
Do you think falling home prices help anyone?
Q. "Do you think falling home prices help anyone?"
- G. Rubinoff in Mission ViejoA. Yes, I definitely do - especially for the "move-up" home buyers. As an example let's say in certain areas condo prices have fallen 10 percent and more. A seller's $200,000 home may now be worth only $180,000. But to the buyer the difference or "spread" works in their favor. They can purchase a $350,000 home for $315,000. So, if we consider today's very low interest rates, special loans becoming available and in most areas a wider selection it's definitely a great time to move -up.
Q. "Although you seem to be anchored in the business Jim, during these difficult real estate times hasn't there been a huge decline in total Realtors and don't Realtors need to changes to survive? - Emad in Lake Forest
A. Yes, to both parts of your question. My broker associate partner and I recently went to an appointment for a new marketing/printing company I was considering of hiring for my newsletter.
As we followed our host inside the impressive large multi-storied building we passed dozens of empty desks. My inquiry revealed that there once was over 1,000 Realtors in the building now occupied by 50.The true professionals who had enough time in the business to build their client base survive and along with them the newer survivors have definitely adapted
Your question prompted me to research the subject further and I went to a recent excellent report from Jeff Davi, commissioner of the California Department of Real Estate, which included some revealing facts.
In January 2000, the total licensee population was 303,000.That grew every month and peaked in December of 2007 at 548,959.
In 2005, the DRE administered thousands of license examinations a month, setting a record in April 2005 by testing more than 22,000 would-be brokers and salespersons.
Less than 2,500 have sat for a real estate examination during the first quarter of 2008.
"Agents/brokers need to retool and change their approach," the report states.
So, Realtors, brokers, buyers and sellers need to change their approaches. Real estate owned properties (REOs) and short sales were not much of a factor five years ago.
Now, in some markets the sale of foreclosed properties and short sales represent a very large percentage of sales.
Agents/broker associates in our office who have learned the nuances of short sale and marketing techniques for quick and successful transactions of REOs are continuing to stay in business.
Many buyers and sellers can benefit from their Realtor being educated about the FHA and possibly even CalHFA programs that require little or no money down, and have features that are hard to find elsewhere.
Davi also stated "we all need to understand the real estate market is cyclical" I certainly agree with that. Hang on, Orange County will bounce back sooner than most anywhere.
Jim Flynn is a "Centurion" Realtor with Century 21 Beachside Real Estate in Mission Viejo.
Original article in The Register
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Jim
Jim E. Flynn
CalBRE license #: 01215480
Phone: (949) 463-0739