The answer to that question in part depends on how you define “recover”.  I’m not trying to be cute here.  A buyers definition of “recover” may be entirely different from a sellers perspective which is different still from a homeowner who simply wants to refinance  but can’t because of tighter lending standards.

To buyers who are turning up their noses at what I believe to be a once-in-a -lifetime opportunity – I often respond that the market will recover a year before they decide they have to buy.  Those who are determined to time  the bottom of a market are destined to miss it.

For sellers, the answer is more complex.  What sellers are looking for is a robust market with a substantial price hike from present values.  Although all bad things come to an end, if you are looking for the glory days of 2005-2006, you will probably have a long wait.

Some areas are recovering while others decline:

Some parts of Westchester NY  are already recovering. In areas such as Scarsdale and Larchmont, we saw our fair share of competitive bidding this year.  This breath of fresh air was restricted to single-family homes in specific municipalities.  Prices in these areas are well off their lows in spite of continuing declines elsewhere.  But   some markets that had been remarkably resistant to correction took a  sickening nosedive in prices.  If you live in a high-end cooperative or a townhouse, you probably know what I am talking about.

Supply and Demand: 

Housing prices reflect supply and demand.  You can not have a robust recovery until demand returns.  Although there are hopeful signs for the Spring of 2012, we saw those signs in 2011 and our hopes were dashed by the stock market correction that was the result of the Euro crisis. First time buyers were out in droves in the spring and summer. But any bad news gives  buyers a big case of cold feet and the rush back to their rentals and renew their leases.  What looked to be a great spring/summer market flopped miserably as buyers dove for cover.  With no demand prices sank again and many sellers couldn’t find buyers for their homes.

What happened to demand during the crash?

To get a perspective on this, here is a chart of simple housing sales volume since the year 2000.   The market in 2000 was not in bubble mode, it was a fairly normal, market. So the sales volume of 2000 -2001 could be considered a reflection of normal.  The bubble started and sales volume peaked  in 2004 to over 9800 properties sold.   Sales volume decreased from that point on  and finally crashes in 2008  tumbling  26% in a single year.  The declines continued in 2009.  Prices followed the loss in sales volume and there you have it – a housing crisis was born.

NOTE: All data was taken from the EAMLS and includes  sales  of single-family homes, condos and cooperatives.  Rentals, multifamily homes, and rentals were not included as they represent a different type of market.

Where are we now?

Sales volume in 2011 was down from the 2010 when the tax credit was in place, but up from the lows of 2009 by about 6%.  But we have a long way to go to get back to healthy demand.  We are 41% below the peak volume of 2004 and 26% off from the more normal market of 2000.

With demand remaining low sellers will have to think in terms of the long haul.  Although I have no crystal ball, these numbers and common sense suggest that a healthy market with regular price increases is a long way off.  With demand at such low levels, we could be bouncing along the bottom price-wise for about 5 years.

What should a seller do?  

So….if you want to move because your home is no longer affordable, or it no longer suits your needs (your family is growing or contracting)  it is probably wise to sell.  We can not live in a state of suspended animation forever and there is something to be said about getting on with your life.   If affordability is an issue, the continuing outlay will negate any real benefit of a price increases down the road.  Also, if you sell in order to purchase something that better fits your needs, you are going to do well on your purchase.  However, if you are comfortable  with your outlay and can sustain it with ease, or if your space is truly workable for several more years, then perhaps staying put is the best option.   There is no right or wrong answer and one-size certainly doesn’t fit all.

For further information about your area,  feel free to contact  me by phone – (914-374-5529) or email – (Ruthmarie.Hicks@gmail.com) or  you can simply fill out the form below – whichever method you prefer.  Don’t worry  – I do not sell, spam, or otherwise abuse your information!

© 2012 Ruthmarie G. Hicks http://thewestchesterview.com – All rights reserved.

Unfortunately, unrealistic expectations can set buyers  up for  unnecessary disappointment and frustration.   There are several flavors of unrealistic buyers out there.

The “I want to steal a house” investor:

This buyer is determined to find  a home for pennies on the dollar. They comb through listing after listing and call agent after agent to show them home after home that looks as though it is the bargain of the century.  The trouble is that once they see the home, they realize that this is beyond the simple fixer-upper.  A new coat of paint is not going to do the trick.   These  homes don’t just need TLC – they need to be gutted.

This type of buyer needs to realize that there is no free ride here.  Many of them have been  watching too many late-night TV shows that claim that banks want to get rid of these properties at “any price.”   After the way the banks have behaved over the past year – does anyone seriously think they are going to get the better end of any deal involving a bank?   Banks have shown  themselves to be more than  capable of looking after their own interests.

The “I’ve got champaign taste and a beer budget -but I’m not settling” buyer:

This buyer can appear in any market. Since affordability has improved, it might seem counterintuitive to observe an increase in this type of buyer right now.  Yet, that’s what I’m seeing.   They want far more than they can ever possibly afford and the buyer’s market media hype is giving them tacit permission to push for the impossible.   The sad thing is that this buyer is not looking at the increased affordability of the past year as the gift that it is – instead they are on a quest for even more.

This type of buyer has two choices: bite the bullet and buy what they can truly afford or roll the dice and hope that affordability increases still further.   The latter has true risks in this market. Although prices may decline further, affordability  is probably not going to increase because interest rates are almost certainly headed northward.   This may well more than offset any further price decreases.  For affordability to increase the buyer has to look to their own finances not the marketplace in order to afford “more.”

The buyer who will only put in offers 10-20% below asking price no matter what the comps say:

This type of buyer is of the mindset that “if you don’t ask, you don’t get.”  They want to “test” the seller with a lowball in the hopes that the seller is desperate enough or ignorant enough of the comparable solds  to accept.  As I said in my previous blog about sellers:  asking isn’t getting.

Not only does this rarely work, but it can really offend the seller to the point where the buyer could lose the sale.  Low-balling is not a good way to win friends – or negotiate a sale.  Offers should be based on the comparable sales – NOT the asking price.  Many seller’s have already priced their homes realistically.  A realistically priced home is more likely to be having multiple offers – so low-balling is a bad idea.

At the end of the day, buyers need to take a realistic look at the comparable sales.   Those numbers are not lying and placing realistic offers in that “sweet spot”  where they are consistent with recent sales – leads to success in the long haul.

In the end, the sale and purchase of a home should be a win-win for all concerned. It’s not about “beating the market” or “getting the better end of the deal.”  It’s about negotiating a transaction that works for all parties.

© 2010 Ruthmarie G. Hicks – http://thewestchesterview.com. All rights reserved.

In the end, I  promised a sequel  that got into more specifics.  So here it is – six  major myths about  listing a  property and marketing a property that are often trumpeted by our own industry.  Its been said that if you repeat something often enough it becomes “fact” in the eyes of the consumer.  So let’s put some of these “facts” to rest.

Myth #1 – “We have  12 billion to the 10th power  active listings, so  our reputation speaks for itself!”

Really?  How on earth does anyone come to that conclusion?  You can have all the listings in the world, but if you can’t sell them, what’s the point?   The percentage of sold listings is a bit  more pertinant. However, even that number does not discriminate between individual agent performance.

Myth #2 – “Your listing will appear on our website which is on page 1 of Google!  That will draw in TONS of buyers”

Yup – it sure will be – along with every other listing in the ENTIRE MLS – whether you are listed with this brokerage or not.

Why? because listings and pictures are like  crack-cocaine to buyers and that’s what  these sites are designed to lure.  The “bait” has to be the entire MLS or the buyer will be on to the next site in very short order.   So rest assured your listing will appear on their site just like every other listing on the MLS whether your contract is with them or the small independent broker down the street.

Myth 3# – Our brokerage has the big dollars behind it to fully support your listing!

It sounds really comforting.   Many consumers believe that a big listing brokerage must be brimming with money to market their home.  Why wouldn’t they do it if they stand to make so much more once the sale is complete?

There are a couple of problems with that notion:
1. That big plush brokerage has a big plush overhead to go with it!  That’s a fixed cost that doesn’t go away and in many cases it has become a monster demanding ever more revenue to sustain it.  Most brokerages are not nearly so flush with money as they were in years gone by.

2. The other problem is “risk.”   By marketing a house the agent or/and brokerage puts money on the table and assumes a financial risk.  The risk is that the house won’t sell.  No matter how good you are as an agent or broker…its a game that you will not always win.

Most sellers would be shocked at how little a brokerages will actually spend. But the  fact is  that if a broker is holding  700 listings, how much money can they spend at any one time?   If you spend $2000 on each listing that’s  $1,400,000 in outlays – with no guarantee of success.  HELLO!!!   Do you see now what I mean about the risk issue?

Brokerages of this size are generally playing a numbers game.  They throw 700 listings up against a wall and some will actually “stick.”  The sheer volume of listings necessitate this approach.  But how wedded to each listing can a brokerage of that size be? That dedication must fall on the individual agent representing the seller.  Since the agent doesn’t carry anything close to a the volume of a major brokerage – each individual listing is of far more importance.  This is another reason why sellers should look to the AGENT not the BROKERAGE when selecting a professional to list their house.  .

Myth #4 – “Our brokerage has a terrific individual marketing!”

If a brokerage has  over 700 listings, how individual can the marketing plan possibly  be?
Usually  that means that the listing will be sucked up into the cookie-cutter marketing machine they throw at every listing.

In fact, if the agent keeps intoning “my brokerage does this, my brokerage does that” it is often a signal that they may well have divorced themselves  from all but standard brokerage marketing. In this tough market that’s not a good thing.  It is also a sign that nothing truly unique or outside the box will be brought to the table to help move the home.

Myth #5 – “We are the biggest brokerage in the area with the most agents and everyone of them is ‘motivated’ to find you a buyer.

WHOA!!!  All I can say to this is RUN THE OTHER WAY!!! This may well mean that they are highly motivated to keep the sale “in-house” which is  code for the agents have a financial motivation to do so.

This is a problem on so many levels, it’s hard to know where to begin.  For openers it violates the spirit of the MLS.  The MLS’s were created to  level the playing field between competing brokerages so that buyers and sellers could work with whoever they wanted to without feeling they were at a disadvantage.   Creating financial incentives to keep sales in-house throws a monkey wrench into that system.

It may sound great – having 500 agents looking to find you a buyer,  but there’s a big elephant in the room.   If the listing agent is motivated to keep the sale in house, what will they do if an agent from a competing office brings in the best offer?  Will they push an ‘in-house’ offer?   Even if it truly isn’t the BEST offer? The answer depends on the individual.  I know many agents who would never compromise their sellers…but there are always a few who would.   Bottom line:  Why work with a brokerage that encourages this since it can almost invites unethical behavior? In the end, the numbers tell the story.  There are roughly 6500 agents working in our county.   Even if a brokerage had 1000 agents, statistically, it is far more likely that the “best” offer will come from an agent outside the listing brokerage.

Myth #6 – Our big brokerage has a relocation service that brings in gazillions of buyers just panting to see our listings!

Please see myth #5.   Any buyer coming in through a relocation service will be looking at the entire MLS inventory…not just the listings within that brokerage.

So there you have it….six common myths about listings, agents, brokerages and marketing.  I hope this adds some transparency to an issue that is generally a black box to consumers.

Further Reading:

This Brokerage Has 750 Listings…..So they must be the best! (Part 1)

Mirror, mirror on the wall…who’s the fairest listing agent of all…Part 1:

Mirror, mirror on the wall…who’s the fairest listing agent of all…Part 2

© 2009 Ruthmarie G. Hicks http://thewestchesterview.com

What Does the Brokerage Bring to the Table?

With the Westchester NY real estate market in a downward trajectory,  sellers realize that they need more than a sign in the ground to move their property.  In truth, this was always the case, but these days I’m getting more and more questions about marketing the listing. One of the biggest issues  I encounter on listing presentations  are questions regarding the brokerage itself.   Most questions revolve around marketing.  What does the brokerage do in terms of marketing  for the listing?

I think that most sellers assume that since the brokerage is “big” and has capital behind it, that they are the ones spending  big bucks on marketing the home.  But this is rarely the case.   Many big-box national brokerages build on that confusion and perpetuate the myth that their brokerage “brand” makes a significant difference in selling a home for top dollar.  They also tout their “marketing package” in terms of the amount of support they offer.  Some actually stress that the number of agents in the brokerage somehow makes that brokerage better or somehow more able to move the property.   With all the hype and misinformation out there it is small wonder that sellers are confused.

I  would challenge these large brokerages who claim that their numbers speak for themselves  to enumerate exactly WHAT  they do to justify their claims?  And while they are at it, I would like to have some hard numbers to back up their success stories.  I haven’t seen any of them come up with any marketing advantage that holds up under scrutiny.  Most of the time they appear to be blowing smoke.  Don’t get me wrong, I’m not slamming big brokerages. That would be rather foolish since the brokerage that I am currently associated with is quite large.  What I am trying to do is cut through the hype.

Follow the Advice of Deep Throat:

Who actually sells the listing? The agent or the brokerage? To figure that out you have only to listen to the words of “Deep Throat” in All the President’s Men.   He told Robert Redford to “Follow the money!”

If a brokerage has  hundreds of agents, it is likely that they have close to 1000 listings.  Brokerages are business to make money on sales.  For a big brokerage like this – the listings are a numbers game.  Throw 1000 up against a wall and maybe half will “stick.”  So how important is your individual listing going to be to that brokerage?  Answer: not very.

But what about the agent? Most agents have just one to two listings at a time.  Others have more like 20-30.  Agents are paid on commission.  If the property doesn’t sell – all the work they did is down the drain….and  there is a lot more to than sticking  a sign in the ground.  When a listing fails to sell an agent is out usually well over 150 hours of time AND they are generally out a good deal of marketing money as well.  Do you think that agent cares if your home sells?  You better believe it.

Take Home Lesson:  Look to the AGENT to market and sell your home.

Stay tuned for part 2 – where some major marketing myths will be revealed.

Further Reading:

Mirror, mirror on the wall…who’s the fairest listing agent of all…Part 1:

Mirror, mirror on the wall…who’s the fairest listing agent of all…Part 2

© 2009 Ruthmarie G. Hicks http://thewestchesterview.com.  All rights reserved.