A nation hunkered down…

By
Real Estate Agent with Real Estate One

In today’s Bloomberg News there is a story about homebuyers “hunkering down” in today’s economy instead of buying homes. The story used the definition of hunkering down as hiding in fear. The reporter sited instances where buyers even pulled back offers, based upon the turmoil in the stock market and the resulting uncertainty overall with the economy. People are hunkering rather than buying.

 

I guess the news is bad. NAR reported that July sales fell to the lowest point this year and Karl Case of the Case-Shiller report even was quoted in the Bloomberg article as stating that another recession may happen if the housing segment continues its swoon.

 

Indications of the malaise included the fact that applications for mortgages to buy homes dropped to a 13-month low in the week ended Aug. 12, even with rates at historic low levels, according to the Mortgage Bankers Association. The article reported that Bloomberg Consumer Comfort Index sank to the lowest since the official recession. In addition the stock market has been down for 4-5 weeks, so many people have seen their down payment nest eggs disappear. Even with low mortgage rates there has also been a huge increase in cancelled deals due to low appraisals according to the story.

 

The result of all of this gloomy news is a nation hunkered down, doing nothing until this all blows over.  However, this is one of those chicken or egg situations. In the past, the economy has always been led out of recessions by the housing industry. Improvements n home buying led to increases in building which led to better employment and on and on. This time no one is buying, so few builders are building and the whole mess is feeding upon itself.

 

Even attempts by the government to encourage home buying by keeping rates low and promoting program after program to encourage lenders to loosen up have not worked. The encouraging news that foreclosures were down the last couple of months was driven as much as anything by the lenders’ reaction to the various robo-signing investigations into foreclosure irregularities, not by shifts in the fundamentals of the housing market.

 

So, what’s a Realtor to do in this hunkered down world? In my area at least, there are still sales happening – they are just low-end sales to investors and first time buyers. So I focus upon them. There are few move-up buyers (those in the move-up sweet spot in this market of $200-400K) out looking, but I do get an occasional one or two. They are usually very finicky and are really looking to steal a move-in ready house at “destroyed foreclosure” prices. It’s just the nature of the market.

 

Many of the buyers in the move-up price range in this area aren’t the classic move-up buyer with a house to sell or who just sold; they are the people who lost their own homes to foreclosure 3-4 years ago and now have repaired their credit enough to start looking top buy a home again. They have to be vetted carefully with a good mortgage person, so that I don’t waste a lot of time with wishful thinkers instead of real buyers. More than once my mortgage person has had to tell them that they still have work to do on their credit before they should be out looking.

 

I guess that Realtors need to use the other definition of “hunkered down” that I found on-line in the Urban Dictionary – “to get to work, to focus on the job at hand.” We have to hunker down to the basics and work harder at sales that return less in order to get through this mess. If there is any good news to come out of all of this it’s the exit from the real estate business of the marginal, would-be Realtors and part-timers. That has concentrated what little business there is out there to the Realtors who have hunkered down to ride this thing out. So, hunker down fellow Realtors and let’s work our way through this recession.

 

Posted by

 

 Norm Werner

Real Estate One

 

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Groups:
Diary of a Realtor
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Tags:
recession
housing market double dip

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Rainmaker
604,132
Pamela Seley, REALTOR®
Menifee Lakes California Real Estate
REALTY EXECUTIVES OTF

Hunker down is right. Jobs, housing prices, ability to get mortgage loans because many buyers are out of the market now because they've lost their homes to foreclosure in the last few years. In my area we've got a ways to go. I've seen some part-timers leave, but many agents are hanging on because there are no jobs. It will be a test to those that can hunker down for the next several years to stay in the business.

August 22, 2011 01:23 PM
Rainmaker
335,335
Lloyd Binen
Silicon Valley R since 1976;408-565-8177
Certified Realty Services

Agreed Norm,

We must hunker down, work smarter, harder and with less compensation and try to get through the mess.  We must also support governmental policy that builds a solid fiscal and monetary base. 

August 22, 2011 04:04 PM
Rainer
6,846
Jonas Soder
Paradise Mortgage Mexico

The US is falling off a cliff with obama at the helm "in his bus" and "congress on vacation"...               Hmm, would like to see those fools trying to work in private sector, guess wouldnt be long before they heard YOU ARE FIRED!

Its insane, yes there are pockets surviving ok. But we are fortunate to be on both sides of the border and when back in california we see a whole different view than when watching international news stations in Mexico.  

Good part for us is we are seeing more Americans looking for rentals and purchases. Not so much condos on the beach as small houses etc. Looking for lower cost of living climate health care international schools for kids etc quality of life. Like man from Arizona had 3 ups stores he just sold getting out of the rat race..

Interesting and somewhat scary times.

 

August 22, 2011 05:29 PM
Rainmaker
188,248
Mary Hutchison, SRES, ABR
Specializing in Brookside, Waldo, Prairie Village
Better Homes and Gardens Real Estate-Kansas City Homes

Shrink the unemployment rate...housing sales will rebound. Everything in this lame economy depends on more jobs and more consumer confidence. Those who are buying now are empty nesters with excellent pension benefits and young professionals with secure jobs.

August 23, 2011 06:45 PM
Rainmaker
240,024
Norm Werner
Real Estate One

Thanks everyone for your comments. Sorry I didn't respond sooner - I was hunkered down working my two jobs and trying to stay afloat in my micro market, which is still fairly bad.

One thing that this current tough time has reinforced for me is the incredible importance of business networking. I'm currently not a member of any of the paid business networking groups (BNI and LBN) in my area, but I do participate actively in two local Chamber of Commerce networking groups and in Chamber events and activities in general. Just getting together with other local business people once or twice a week has lead to several deals for me and I intend to continue and even increase my involvement with those groups and other volunteer and service groups in the community.

I won't get started on how frustrating it is to see the clowns that we have in Washington on both sides of the aisle right now holding up the important things that need to be done to satisfy small partisan groups on the left and right.

For Greg (#9 above) I have to cop a plea that I blindly repeated something that I heard on a newscast recently to the affect that improvements in housing was always a leading economic stimulous to breaking out of past recessions. There have been one than one commentator mouthing the phrase that housing got us into this mess and improvements in housing starts and sales will have to lead us out. Personally, I believe as many others have stated, that the uncertainly about employment is our biggest obstacle to making progress right now.

August 23, 2011 09:06 PM
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Rainmaker
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Norm Werner

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Posts about things going on in Real Estate in Milford, Michigan; Highland, Michigan; White Lake, Michigan; Commerce Twp, Michigan,; West Bloomfield, Michigan; South Lyon, Michigan; Birghton, Michigan and HArtland, Michigan in Oakland and Livingston Counties of Michigan