Thinning the inventory herd...

By
Real Estate Agent with Century 21 Results Realty

While cruising around today, I ran across a great post by Linsey Planeta.  You should go give it a read.  Primarily it is about real estate agents finding a little piece of positive info and blowing it out of proportion...  And to that extent, she has hit the nail on the head. 

But then in the comment stream I noticed something about how the increase in sales was largely due to getting the foreclosures moving through the system... and that they didn't count.  Nothing could be farther from the truth.  Prices are down because foreclosures are polluting the numbers... true.  Sales are up because the lower priced foreclosure are clearing... true. 

But that is part of the cycle... it HAS to happen.

Right now, foreclosures and distressed properties are the old and sick of the housing inventory herd.  In order to return to a healthy market, the old and sick inventory have to get eated by the predators.  They need to be culled.  In my area, inventory levels are still very high.  They aren't as high as they were a few months ago, but they are higher than they would be in a market that is even slightly out of whack. Absorption rates and sales statistics won't look healthy until the herd is healthy. 

We can try to be the guy in the video...  but we aren't always going to win.  We have to accept the circle of life...

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Debe Maxwell
www.AtHomesCharlotte.com | Savvy + Company Real Estate - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Hi Lane!  You're absolutely right and today (in this market, don't know about tomorrow!) the market is moving homes for first time homebuyers--if they're foreclosures for them, then that's GREAT!  They'll see appreciation more than usual in the next few years and be ready to call you to buy another home in 4 or 5 years!  It is a cycle and we're starting from the bottom and working up now!

Debe in Charlotte

Nov 23, 2008 10:07 PM #1
Rainmaker
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Thom Abbott
MyMidtownMojo.com |770.713.1505 | Intown Atlanta GA Condo Living - Atlanta, GA
Midtown Atlanta GA Condos For Sale

Lane...I read Linsey's post as well. I think we as agents have to be careful with the advise we give. Until we get the foreclosures out of the market (and stop adding them TO the market) I have to question if we have hit the "bottom" yet.

It's our job to counsel and guide our Buyers and Sellers, but none of us has the crystal ball...if we did, we would not be in this situation. Foreclosures certainly DO count this time...they are going to have an impact on values.

I can hardly wait for tomorrow! Whenever that is!

Speaking of...we need to meet up and do lunch one of these days! We only live 2 counties apart!!!

Nov 23, 2008 10:09 PM #2
Rainmaker
640,198
Marchel Peterson
Results Realty - Spring, TX
Spring TX Real Estate E-Pro

Lane, I love your circle of life concept (I loved the Lion King).  I just added a lease page to my website just a few days ago because of this circle of life stuff.  I had my first hit today and when I set her search up I found 146 lease listings. I did not search that HUGE of an area either.  I think a lot of them are those listings that aren't selling but it all fits in to the circle of life.

Nov 23, 2008 10:15 PM #3
Rainmaker
682,287
Ruthmarie Hicks
Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605 - White Plains, NY

Yes, but isn't this how a housing recovery truly starts.  It doesn't mean its not yet a good time to buy....you buy when everyone else is scared....

Now SELLING (at least around here) is another matter.  If people don't need to sell they shouldn't.  There are only a few specific circumstances where selling is a good idea in this market.

Nov 23, 2008 11:35 PM #4
Rainmaker
536,364
Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker-Owner,CRS,CDPE,GRI,SRES, Brea,CA, Orange Co

Hi Lane,

I think you're pretty much right on with this post. Except many of our REO listings aren't tired and old, they're actually some of the newer ones. They are however, the driving force in our market too in So Cal. It's just part of the process, the cycle we're in now.

The good news is that, although prices are down our sales numbers are up in 2008 compared to 2007.

Nov 23, 2008 11:55 PM #5
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Janna Scharf
Keller Williams Realty Coeur d'Alene - Coeur d'Alene, ID
Coeur d'Alene Real Estate Pro

Yep, history always repeats itself.  Real estate is cyclical, things are bound to improve ans the self-correction continues...

Nov 24, 2008 01:04 AM #6
Rainmaker
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Ann Dail
Baton Rouge Area Homes, Louisiana, USA, 225-761-0551 - Baton Rouge, LA
Broker/Realtor,CRS, ePRO, SRS, B.A.Chem

Good perspective that life is full of cycles.  We need to keep them in a realistic perspective. 

Nov 24, 2008 09:42 AM #7
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Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Debe - I have a guy that is on the edge right now.  He really wants to buy, but he is nervous.  He doesn't have a property to sell...  And we are looking at forclosures (or anything that is a great deal...).  He is the face of the new market for the next few months at least. 

Thom - Can't do it today, but we need to... we can meet someplace neutral like DeKalb...

Marchel - I have been surprised by the number of leases available as well... I think they are the next glut. 

Ruthmarie - Investors should be going bananas right now.  I see properties that can cashflow as soon as next month. 

Lynda - As properties they don't have to be the old and sick... it is as listings.  they are the ones that are distressed.  I know of a foreclosure right now that is 2 years old and perfect... another that is 4 years old and perfect.  But they are still distressed and underpriced. 

Janna - It sure does.  And we all will be hating it when people are looking back 6 or 8 months wishing they had purchased... and we will hate it if people are looking back 6 or 8 months wishing they hadn't. 

Ann - Perspective is important.

Nov 24, 2008 10:42 AM #8
Anonymous
Anonymous
Anonymous

Thank you, Lane, Linsey's post is a great read. I almost missed it.

Nov 24, 2008 11:21 AM #9
Rainer
44,064
Linsey Ehle
M Realty - Rancho Santa Margarita, CA

Wow Lane.  I appreciate the feedback and the link love.  By accident the post was stuck for several hours at the top of the AR blogs page and I had an unusal amount of traffic.  Glad that it was a post that started a great conversation.  I've been fascinated by the feedback and thought your point was spot on.  Thanks.

Nov 24, 2008 02:45 PM #10
Rainmaker
573,927
Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re

I agree we need to get the inventory down and when that happens we will create a bit more demand and get our market back "Normal".

Nov 24, 2008 07:53 PM #11
Rainmaker
347,757
Dan Brudnok
Keller Williams RE- Exton - PA License Number #RS225179L - Downingtown, PA
REALTOR,e-PRO,ABR,GREEN,SRES,CSP

Lane,

We have had a few "blips" here that show it is working toward a remedy and the inventory needs to thin to get ready for the spring rush to sell and move.

Nov 25, 2008 04:43 AM #12
Rainmaker
353,982
Dale Terry
Yadkinville, NC

Foreclosures matter in a number of ways.  The rental market begins to get crowded as more and more people look for rentals and the number of foreclosures affect prices.   Unfortunately, I think that we will see an increase in foreclosures in the near future. 

Nov 25, 2008 06:27 AM #13
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Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Huiting - Glad I was able to point you to it. 

Linsey - There are a lot of conversations we need to have... with each other AND with consumers.  Good job. 

Terry - I like seeing the new inventory down here in Gwinnett... especially with sales moving up a little. 

Dan - I hope there is a spring rush. 

HRG - I think that we will see a slight increase in foreclosures, but I would be that it won't be anything like what is predicted.  And they certainly matter.  Anyone trying to NOT include them in market reports is missing the boat.

Nov 25, 2008 03:15 PM #14
Rainmaker
271,223
Ken Cook
Digital Content Creator - Marietta, GA
Writer For Hire

Uh, when the thinning gets so close my office is down to my wife, Kim the magnificent and three outside LO's I call a halt to it. Especially when we're still geared up for 22 employees! Hey, if I don't talk to you before then -and I probably will- please have a happy and safe Thanksgiving.

Nov 25, 2008 10:56 PM #15
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Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Ken - I'll call you so that you can be sure to talk to me before T-day. 

Nov 26, 2008 12:42 PM #16
Rainmaker
255,460
Robin Rogers
Robin Rogers, Silverbridge Realty, San Antonio, Texas - San Antonio, TX
ABR, CRS - Real Estate Broker & Investment Adviser

Excellent point, Lane! Much as I hate to deal with HUD homes and REOs, we will need to get through them.

Cheers,

Robin

Nov 28, 2008 09:48 AM #17
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Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Robin - I don't particularly like dealing with them, but they are the reality of today. 

Nov 30, 2008 09:40 AM #18
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