Beat Negativity!

We are all hurting in this economy.  Home sales are sluggish and may remain sluggish.  Job retention is a common concern among many.  In this type of environment it is easy to get discouraged.  The bright side is you can choose to not stay that way!  I fight this negativity daily in my life. 

I try to tell myself a positive story.  I can accept what I hear and read that is negativity from media or I can look for something much more positive.  I do not define myself as a drama or a horror movie.  Instead I consider myself a fighter, an overcomer.  I may not be able to control the economy, the market conditions in real estate or my environment, but I can influence the outcome of my day.

I seek out the advice and counsel of successful people.  That may be done face to face or it may be done through my reading.  I then model my attitude and actions to succeed.  If they can, so can I!

I do my best to not listen to negative voices and make positive choices.  I try to focus my efforts on my family and my business, taking care of my clients, and building loyal relationships.  Each morning I ask myself what are three important things I must do today to obtain the success I desire.  Taking the action is often the hardest, but I will do it.

I have said for years when teaching other real estate agents, they must remove the words "have to" and replace it with "get to".  This mind-set can change and will change your approach to work and life.  Life is a gift not an obligation.  When we practice gratitude, we get a greater degree of happiness.  This energizes me and often lowers my stress level along with exercise daily!

I refuse to participate in this recession.  Those who thrived during past recessions generally continue to go about business as usual.  I work hard and focus my attention on the actions that grow my business.  I refuse to be paralyzed by fear.

My positive vision is everything for me!   When I make the decision to be optimistic, I create a positive vision for my future.  Vision helps me see the road ahead and shows me a value to strive towards.

I try to abide by the no-complaining rule.  It is not always without a stumble mind you, but when I replace a complaint, nagtive thought or word with more positive actions life looks much better.  The key is to turn complaints into solutions.

I am frequently asked when I plan to retire!  That question always brings me to a thought.   Why would I retire when I enjoy what I do for a living!

I have been selling real estate since 1976.  It has always had its ups and downs.  But, obviously, more ups than downs!  I have worked several types of markets during that time.

The one constant I feel is that I am helping people buy one of their largest investments.  I know at times that can sound trite, but I have to say that I count many of my past clients as very good friends since our first contact.

I took a hiatus from actively working my business to teach new agents as well as experienced agents how to sell real estate.  It was truly rewarding for me.  In Oregon many of our laws changed in 2003 and that required additional education for all practicing sale people and brought on the need for a specific course all new brokers had to take to renew their license for the first time.  I taught many of those courses including ethics courses around the state.  I so enjoyed meeting all those real estate agents.  They are all unique and have a different outlook on any market in any area.

I continued doing the training for my office then until 2008.  The market was so very interesting and challenging that I felt it was time to move back into the active real estate business.  I have to work harder than I have ever had to work in this business, but the rewards are still the same.

I am caring for my two grandsons who will be two in July and I am enjoying it immensely.  There is something about doing my real estate business and caring for two children that seems to ring a bell.  The problem is I am 30 years older.  I believe as grandparents we can weather the same storms we had when we were young with children, but we do it differently.  Now I have more maturity and know life will go on if a shoe is not picked up or a room is not clean!

I wish all who read this the best day you can have.  Treasure all your moments with friends and loved ones!

In an earlier blog I suggested that I would give you some thoughts on today's market.  The following is a continuation of that thinking.

Considerations

Residential houses are not in a typically speculative market!  Most people buy a house to live in as their home not to resell it for a profit.  The fastest growing segment in our market is first time home buyers who are trying to take advantage of the $8,000 tax credit. 

In the last couple of years, buyers who have graduated from school, gotten better jobs, married or divorced, had children, upgraded or down sized want to buy.  They have hesitated to purchase due to many factors among which is uncertainty of the economy.  That has created a pent up demand.

As the buyers realize it is a good time to buy but not necessarily good for sellers to sell, the demand will begin to absorb and exceed supply.

Inflation

It is my opinion that we are on the verge of an inflationary surge.  On the other hand I think most people tend to ignore the possibility.  Gas prices in general have risen though they seem to fall and rise periodically and at the moment seem to be down.  That appears to be all that is down.  Trillions are being spent on the bailout. 

The definition of inflation is when the amount of money in circulation increases and the available goods decreases.  As I see it, this is what is happening. 

When inflation does devalue our money, then house prices together with prices of all other goods will increase and this years buyers are going to benefit greatly.  Whether this happens or not, now is the time to buy!

Investors

For years I said it is not time to buy investment property.  With the decline in property prices, and the inability of more and more people to prove creditworthiness or employment stability, buying residential rental property makes good sense.  To enter this market one needs to be smart.  If a loan will be involved the down payment is much larger than we have been used to in the last several years.  One also needs to have a large reserve (up to 6 months loan payments) in the bank to qualify.  If we do not see any large population exodus (companies folding and people losing jobs) the soft market is good for an investor.
     

This is a real estate market that two years from now everybody is going to say, I wish I had bought then!  Lets look over the next several days at some factors I feel indicate that.

Financing

Interest rates are below 6% on residential mortgage loans.  We do not see this often and when we do it generally does not last long.  Prior to the 2003 to 2005 era when rates hovered above and below the 6% threshold, it didnt stay long.  Before that it had been 40 years that rates had been below 6%.

Mortgage money is available.  The requirements are quite reasonable given the lack of quality of repayment ability we experienced in the last 5 10 years.  Buyers need to have steady employment and a reasonable credit rating.  In days past buyers needed to prove their employment and have a reserve of cash in their bank account and those requirements have returned.

Inventory, Foreclosures and Pricing

According to our MLS for the month of May, 2009 we had (depending on price) anywhere from 8.16 to 116.5 months of inventory on the market.  The properties priced between $100,000 to $225,000 have an 8.16 month supply.  Properties that are priced between $325,000 to $425,000 have a 116.5 month supply.

As of the end of May, 2009 we had 136 foreclosure properties sell at an average price of $195,876.  They sold at an average of $101/sf. with 110 days on market from the time it was listed until the sale closed which of course includes the loan time. 

Depending again on what area we are looking at, our price has dropped from May of last year anywhere from 1.6% to 12.6%.  To sell today, one must be extremely competitive in pricing and your house presentation has to be stellar.   Otherwise the buyers tend to go to the purchase of foreclosures.