Realtors vs. The Media

In today's market, the real estate agents biggest challenge is not the market itself, but the media that refuses to talk about any of the current trends that favor current sellers. Yes, the current real estate market still has its challenges, but today's outlook for sellers is better that it has been since early 2008.

The market has never been better for buyers. Interest rates are at record lows, home prices have stabalized, there are many programs still available to assist buyers in purchasing a home, low down and no money down purchasing options, and home affordability is better than it has been in decades. Buyers have been getting very active this spring, and there is a pent up demand for those that have been waiting to see stabalization before they make the decision to purchase. Their only difficulty is based on getting enough quality homes to look at in some segments of the market. There is still a large percentage of owners that could be on the market, but they are convinced that they can't sell their home if they wanted to. This is largely based on the constant negative outlook coming from the media. Many buyers are surprised at the amount of house they can get for their money today. Buyers are picking up properties that they never would have thought they would ever be able to afford.

Real Estate is always local, and the Twin Cities market is one of the strongest markets in the nation. For sellers, home prices are stabalizing. Home prices for the last year vary by city, but the range is from minor decreases in some areas to flat in some areas to minor increases in others. It is based primarily on the desire for certian areas. For example, areas like St. Paul's east side is not very desirable and has still lost some value. On the other hand, areas like Woodbury, Cottage Grove or Lake Elmo are more appealing and have had mild gains the last year. The overall outlook shows that prices are at their low point and are expected to hold their position. It is still uncertain if we will see any significant gains in the near future, but holding steady is an improvement compared to the downward spiral of the last few years. The other good news is that even though there is still some inventory of distressed properties to hit the market, the number of new properties going into defult have been decreasing. Therefore, it will still take some time to clear out the distressed properties that are yet to be released, but the overall distressed market will gradually be decreasing. Less distressed properties will lead to better prices for the regular seller. The townhome market is expected to take longer to rebound than the single family home will. Largely based on the huge inventory of distressed townhomes that still need to be cleaned out, and the townhome market took a larger hit on pricing compared to the hit the single family home market took. This is leading to more townhomes needing to short sale in order to sell the property today. In today's market, if you are a seller with a quality property that can list at market value, these properties are moving quickly. We are seeing these properties selling fast and sometimes even in multiple offers. Buyers that are properly informed do not want to miss out on the great opportunities available today.

An example of the media creating bad information to the public would be the recent Case-Shiller report that got a lot of attention in the media lately. They are trying to convince the public that the housing market took a second huge drop in pricing last year. The problem with this statement is that the prices were inflated temporarily due to the tax incentives that were given by the government in late '09 to early '10. These incentives generated a large push to buy, which in turn drove up prices for a period of time. They then tried to say that the downturn in pricing following the tax credit expiring was a second large drop in home prices. When in fact, the prices only returned to the trend they were on without the introduction of the tax credit.

Unfortunately, this misrepresentation of the facts has been causing some negative feelings in the public that are detering them from accomlishing their goals. I understand that not every seller can or wants to sell in today's market, but there are alternate options they can consider that can help them accomplish their goals. Hopefully, if you are in the market to buy or sell today or in the near future, you will take the time to properly research the current trends and not just take the advice of someone trying to generate some buzz by focusing on what gets people's attention.