Sent: Thursday, November 13, 2008 11:20 AM
Subject: greetings from your rogue agent
I'm first writing to apologize for my lack of participation and communication with the office. I have been in contact with Kathy for some extensions but that's about it. I will make an effort to get to some meetings and be more involved.
It's been a disappointing year to say the least. I had such high hopes that we would get some real buyer activity down here, but it didn't happen. I had showings,(not as many as I would have expected), but offers were slow to come. I was also hopeful that the new development nearby would bring traffic, but it hasn't yet. I'm optimistic going forward because Frankfort and Benzie County is still poised for growth, I just know it's going to take time. I'm not recommending major price reductions to my sellers because I don't sense that is the reason we're not getting traffic. (A couple listings are down 10%+ and still no offers). If I had some desperate sellers, it would be a different story but I don't. I think we're fairly priced here compared to the market...we just need more buyers.
The tourism trade has been strong and I expect it will continue, despite the economy. We just need some help from the overall economy and downstate home sales to help stimulate 2nd home purchases up here. It will happen...hopefully sooner than later.
Thanks and I'll talk to you soon.
Rogue agent... I like it. Nice hearing from you. I don't know that I'll concede that if you don't have any desperate sellers they don't need to reduce their prices. We've seen median sale prices drop 9.7% in Benzie County YTD, and a total of 13% since 2006. If that trend continues, the gap between your sellers prices and the market will widen. You and they need to be aware of that risk.
Total sales are down 21% YTD in Benzie County, so you're right that we need more buyers. Their return is dependant on a lot of things: increased confidence, increased liquidity in MBS, availability of credit, the stock market and how TARP and housing stimulus are implemented all will play a factor. We're building pent up demand, but need some significant triggers to release that demand.
On the positive side of things, we're seeing early indicators of a recovery in our industry, especially here in NW Michigan. It appears that supply is beginning to tighten, with the number of new residential listings down 19.3%year to date in the TAAR MLS, and building starts way down as well.
Another leading indicator of a turn around is a recovery in number of transactions. Last Friday at the NAR Convention in Orlando, Chief Economist Lawrence Yun noted that housing sales show signs of turning in Michigan, driven by affordability. The rebound of sales units will precede the rebound in prices or sales volume, and I believe it will precede it by at least 12-18 months.
The good news is that while home sales (for the MLS as a whole) are down 11.4% year to date, when we look at October 08 vs October 07 we're only down 1.3%. That means that October was a huge improvement vs. the year overall. In fact, Benzie County actually posted an 8% gain in October!
It's been a heck of a bumpy year, and the economy and stock markets have scared a lot of buyers out of the water. While the words "we're from the government and we're here to help" strike fear in my heart, I know that NAR is actively advocating for prudent stimulus and relief that will aid homeowners and home buyers. I'm very pleased that they have attacked the deficiencies which I felt were inhibiting the use of the current home buyer stimulus package.
The current offering calls for the $7500 to be paid back over 15 years, and it is restricted to first time home buyers only. I feel that to be effective the $7500 credit should not be required to be paid back, but more importantly that the credit should apply to all buyers of a primary residence, regardless of whether or not they currently or recently owned a home.
In the mean time we're building pent up demand. I spoke with one of our regions largest home builders tonight, and he's sold about 43 units this year. He stated that he fully expects that when our market breaks free, he'll do 200 units the first year. A normal good year for him is around 100 units.
I'm always here if you want to talk strategy.