Springing forward or falling back?
03/22/2009
This past week we participated in a survey of real estate brokers conducted by Candace Taylor for an upcoming article in The Real Deal.
Excerpts from that correspondence follow:
CT: How is the early spring market shaping up so far compared to other
early spring seasons?
MHI: In past years the spring market was just a continuation of the high activity that started in late January/early February, fueled by Wall Street bonuses and a robust feeling of economic optimism. That didn't happen this year, and it isn't happening now.
CT: Where are the strongest and weakest parts of the market?
MHI: Actually, all parts are weak right now, and the "strongest" among these we'd still characterize as weak. When activity does increase, we expect the strongest sector will be the low-end market. First time buyers will have the advantages of easier financing, a chance to buy more for their money when compared to the disappointments of last year, and they won't be burdened by the need to sell other real estate (which is no easy task) to proceed with their purchase. The high-end market will need to wait a bit longer.
CT: What are brokers saying to each other about the market, their
deals, etc., while gathered around the water cooler? What's generating
the most buzz?
MHI: The most common conversations revolve around the need to properly determine value, find the most palatable way to deliver that information to the sellers, and help them accept a marketing plan with the best chance for success. Then, the second part of this discussion tends toward reviewing the negative effects produced by other real estate professionals who aren't recognizing the shift in values, or who are, but fail to communicate it to their sellers. Buyers, too, are viewed as needing help to properly quantify the new values. Once sellers, buyers and brokers are on the same page, or at least within the same chapter, the foundation for a healthy, functioning market will return.
CT: What kinds of creative measures are you or your colleagues taking to
get deals done?
MHI: There are certainly a lot, and most involve some kind of departure from the old ways and a search for some new panacea. Some of the new ideas are indeed innovative, but others are merely grasping at straws. When it comes to each broker or firm's survival, time has become a big factor, and we'll soon know what works and what doesn't.
CT: How has your business changed to adapt to the post Sept. 15th
(Lehman Brothers collapse) world?
MHI: Finding sellers isn't a problem, but we're very actively pursuing buyers using a more passive approach. Clearly, buyers need to reconcile two conflicting emotions, they fear or mistrust the present market but still want to improve their personal domains. Right now, their fear is definitely superseding their desire to find a better home. Very few are consciously looking. They're no longer looking at the classifieds, display ads or searching the web to buy properties the way they once did. We need to stimulate buyer interest through other means--by connecting and supplying information to them using a different type of communication. For example, if they're no longer looking at advertisements, but are still reading the papers, magazines, blogs and other websites, make your listings known through articles and general discussion. Use any venue that serves to present your information in a manner that will be discovered by someone who is NOT looking. We think many deals made in 2009 will seem serendipitous. Purchaser's who thought they were not going to buy will somehow come upon their real estate bliss "by accident". Brokers may end up being viewed as lucky, but as Pasteur observed, "Chance favors the prepared mind".
CT: Anything else you've noticed that is surprising/different about
current market conditions? Any trends you're seeing?
MHI: Things are definitely different but not surprising--history tells us what to expect. As to trends, we believe there is a dominant one on the horizon: To paraphrase Elvis, "A little less form, and a lot more function, please". The strong momentum that gave so much value to "style" in selling is gone. Future buyers will expect their brokers to supply concrete answers to many questions, and answers which relate directly to the process and the properties they're considering. Honesty, knowledge and rendering accurate analyses on all levels will be the essential attributes of every salesperson. The public knows this is a time to be cautious and many brokers will need to transform themselves if they expect to succeed.
--Leigh Zaph. (any comments can be emailed to us at webitorials@manhattanhomesinc.com, thanks).
Excerpts from that correspondence follow:
CT: How is the early spring market shaping up so far compared to other
early spring seasons?
MHI: In past years the spring market was just a continuation of the high activity that started in late January/early February, fueled by Wall Street bonuses and a robust feeling of economic optimism. That didn't happen this year, and it isn't happening now.
CT: Where are the strongest and weakest parts of the market?
MHI: Actually, all parts are weak right now, and the "strongest" among these we'd still characterize as weak. When activity does increase, we expect the strongest sector will be the low-end market. First time buyers will have the advantages of easier financing, a chance to buy more for their money when compared to the disappointments of last year, and they won't be burdened by the need to sell other real estate (which is no easy task) to proceed with their purchase. The high-end market will need to wait a bit longer.
CT: What are brokers saying to each other about the market, their
deals, etc., while gathered around the water cooler? What's generating
the most buzz?
MHI: The most common conversations revolve around the need to properly determine value, find the most palatable way to deliver that information to the sellers, and help them accept a marketing plan with the best chance for success. Then, the second part of this discussion tends toward reviewing the negative effects produced by other real estate professionals who aren't recognizing the shift in values, or who are, but fail to communicate it to their sellers. Buyers, too, are viewed as needing help to properly quantify the new values. Once sellers, buyers and brokers are on the same page, or at least within the same chapter, the foundation for a healthy, functioning market will return.
CT: What kinds of creative measures are you or your colleagues taking to
get deals done?
MHI: There are certainly a lot, and most involve some kind of departure from the old ways and a search for some new panacea. Some of the new ideas are indeed innovative, but others are merely grasping at straws. When it comes to each broker or firm's survival, time has become a big factor, and we'll soon know what works and what doesn't.
CT: How has your business changed to adapt to the post Sept. 15th
(Lehman Brothers collapse) world?
MHI: Finding sellers isn't a problem, but we're very actively pursuing buyers using a more passive approach. Clearly, buyers need to reconcile two conflicting emotions, they fear or mistrust the present market but still want to improve their personal domains. Right now, their fear is definitely superseding their desire to find a better home. Very few are consciously looking. They're no longer looking at the classifieds, display ads or searching the web to buy properties the way they once did. We need to stimulate buyer interest through other means--by connecting and supplying information to them using a different type of communication. For example, if they're no longer looking at advertisements, but are still reading the papers, magazines, blogs and other websites, make your listings known through articles and general discussion. Use any venue that serves to present your information in a manner that will be discovered by someone who is NOT looking. We think many deals made in 2009 will seem serendipitous. Purchaser's who thought they were not going to buy will somehow come upon their real estate bliss "by accident". Brokers may end up being viewed as lucky, but as Pasteur observed, "Chance favors the prepared mind".
CT: Anything else you've noticed that is surprising/different about
current market conditions? Any trends you're seeing?
MHI: Things are definitely different but not surprising--history tells us what to expect. As to trends, we believe there is a dominant one on the horizon: To paraphrase Elvis, "A little less form, and a lot more function, please". The strong momentum that gave so much value to "style" in selling is gone. Future buyers will expect their brokers to supply concrete answers to many questions, and answers which relate directly to the process and the properties they're considering. Honesty, knowledge and rendering accurate analyses on all levels will be the essential attributes of every salesperson. The public knows this is a time to be cautious and many brokers will need to transform themselves if they expect to succeed.
--Leigh Zaph. (any comments can be emailed to us at webitorials@manhattanhomesinc.com, thanks).
