The Current State of the Mortgage Industry
Written By: Nadia Ibanez
It’s the age old questions in the real estate market: “When will the real estate market turn itself around so I can actually gain value from my current home” and “When will the absolute best time be to buy a home during the recession?”
While it’s nearly impossible to predict when America will bust out of the recession and return to a “normal” real estate market, we speak with real estate industry professionals about current trends for home owners and buyers.
REAL ESTATE AND TECHNOLOGY
Trulia.com has made quite the name for itself in the online real estate industry and serves as a powerful tool assisting those looking for the right home. Trulia, founded in 2005 in San Francisco, gets more than eight million unique visitors each month from across the nation looking for homes or advice from the site’s more than 500,000 registered real estate brokers and agents offering their assistance.
“Along with being a real estate search engine, we have an active Q&A community on the web with consumers asking realtors and other consumers about real estate trends,” Tara-Nicholle Nelson says, Consumer Educator for Trulia.com. “Our users get hard to obtain answers about their real estate questions without having to call anyone, meet a broker, or pay anything.”
Nelson says that when it comes to trends for potential homebuyers, the market is completely hyper local. “When it comes to consumer behavior trends, we’ve seen an increase of 90 percent of online traffic over to Trulia in the last year,” she says. “Consumers in the post recession era are much more aggressive in their DIY research for pre-home buying. In the local economy, we’re noticing that many users are frequently coming back to the site to check on the status of the home they’re interested in. They use Trulia because they don’t want to rely as heavily and exclusively on advice from a real estate professional, but want other resources for information.”
Additionally, the use of technology has also been a powerful tool in the house hunt, especially because of the Do-it-Yourself trend. “Users rely on our site to see price reductions with properties in one area,” Nelson says. “Current homeowners who are in the market to sell use our site to see market conditions and what other properties in their neighborhood are listed at and see if things are picking up. They’re cutting prices and being aggressive now in order to sell their home.”
For homeowners who haven’t received any decent offers over several months, Nelson believes that you should audit your online listing, since 92 percent of buyers are starting their search online. “Your home’s online representation is really going to ‘make it or break it,’” she says. “You’d be amazed at the number of listings we still see without any pictures.”
Addressing the overpricing is another issue that keeps homes from selling, Nelson continues. “Much of the competition from the individual sellers comes from distressed properties like short sales and foreclosures,” she says. “You cannot always beat them on price, but you can beat them on condition. If you’re home is in pristine condition and still not moving, you’ve got to be real with yourself on how it’s priced.”
LOOKING TO 2011
Dean Jones, the Principal and Owner of Realogics Sotheby’s International Realty in Seattle advises that current homeowners whose properties are in the market and haven’t received an offer should look at new listing activity to see if market conditions are improving. “If you’re home isn’t moving, it may be because there are fewer new listings coming into the market or absorption has increased, meaning that more sales are occurring. It’s still a market that if you don’t have to sell now, most people feel the future will be more sympathetic than in the past. The worst is probably behind us,” Jones says.
“Because prices have corrected, some buyers believe their offers must reflect further correction like low offers on listings, which sometimes requires a great deal of negotiation,” he continues. “It’s sometimes a blinking contest between what sellers believe the value of their home is and what buyers are willing to pay because they feel they have the advantage – and they’re letting you know that by the types of offers they’re giving.”
Homeowners looking to sell also see that prices are stabilizing and are willing to hold on to their property for a year or two to see further improved value because of overall recovery of the economy. “In Seattle alone, major employers like Boeing and Amazon are offering thousands of job opportunities and tourism is up, all of which show positive economic trends,” Jones says. “There is a significant overhang of commercial real estate that grew in the last couple of years so it’s a great time for companies to expand further.”
“In Seattle, 2011 is going to be the year that stability comes back into market for most of the segments,” he says. “It’s been a couple of years since most of the damage was done and the bulk of inventory and distressed properties has been resolved.”