Monthly Archives: July 2012

On That Strong Buyer Demand Thing…

First, watch the video above. It’s my doppelganger Lawrence Yun, Chief Economist at NAR, explaining the 1.4% drop in June pending home sales. This comes on the heels of bad news about June released several days ago:

June Existing Home Sales down 5.4%

June New Home Sales down 8.4%

And predictably, the media and various pundits are all over these three bad news bears.

I’m more interested, however, in one small fact that Lawrence brings out in the video above:

Lawrence Yun, NAR chief economist, said inventory shortages are a factor. “Buyer interest remains strong but fewer home listings mean fewer contract signing opportunities,” Yun said. “We’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors.” (Emphasis mine.)

He later says, “Buyer interest remains exceptionally strong,” and says there’s pent-up demand with all the renters out there today. He blames low inventory levels due to banks holding back REO’s from the market.

Can we delve a bit into this “strong buyer interest” piece?

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Magical Thinking vs. Boring Reality

 

Image: David Spiro

Facebook can sometimes be a gold mine for content. Consider these two seemingly unrelated events:

Marie is a friend who used to work in the real estate industry, as the Director of Marketing for MRIS. She relocated to Florida, and asked me months ago for some agents I knew in the area. I didn’t, so reached out to my friends who did, who promptly came up with a few local REALTORS who are supposedly at the top of their game, rock-solid professionals, top producers, and the like.

You see the result of that above: “Fourth time is a charm.”

What struck me was that on the very same page where I was reading this status update from Marie, I see this ad off to the side:

Look at the copy:

“Top Broker shares unusual marketing strategy for consistent commissions.”

Emphasis is mine.

Why do so many real estate agents spend so much time looking for “unusual marketing strategies”, talking about the latest social marketing tool, spend thousands of dollars or hundreds of hours doing the unique, the unusual, the different, the “this will help me stand out” stuff… and totally miss the basics like, oh, I don’t know… returning a frikkin’ phone call from a possible client?

Because there’s far too much magical thinking and far too little cold hard boring reality going on in real estate.

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Real Estate Hope and Change for the Hope and Change Generation

My friend Eric Stegemann, a Millennial himself, tweeted out the following article from BusinessWeek talking about the “Lost Generation” of Homeowners:

For some analysts, the scariest outcome of the collapsed home-price bubble is that it could turn an entire generation of would-be homeowners into perma-renters. Yale economist Robert Shiller floated the idea of a “lost generation” of homeowners in interviews with Reuters and Yahoo Finance. He thinks there is a chance that home prices in the suburbs may never rebound in our lifetimes.

I’ve been writing, talking, and thinking about Millennials/Gen-Y for quite some time now. It’s kind of a pet hobby. And for the Hope ‘N’ Change generation that went out for Obama in a big way in 2008 (2 out of 3 voted for the young cool hipster over that old and crusty McCain fella), they sure are facing a whole lot of Change even if that Hope thing is a bit thin on the ground.

Let’s chart some of these.

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