Media and the Real Estate Market

Hi Everyone!

So I am sitting here getting ready to watch my Boston Red Sox try to make it three wins straight against the Rockies. I'm very excited. Of course nothing will compare to the Sox World Series of 2004. It's amazing how long it took!

We were having a discussion this week about the media and its affect on the public. We all know that the media spins its stories in whatever direction it wants to go. When something is "hot" they are all over it. Of course "hot" in their opinion is bad. You don't hear to many good things on the news...the truth of the matter is that good news doesn't sell. Bad news creates viewers which creates sales. It's all about the buck!

Right now we are in a changing Real Estate market and we have been for one and a half years now. Nobody really knows when the market is going to hit bottom, or if it already has hit bottom. Depending upon who you ask, you might get a different answer. My take is that this is probably the best time we have had to buy Real Estate in the past 4 years. Prices are pre 2004 and I tend to doubt they will go any lower. With that said, there are some great deals out there too. People who bought their homes prior to 2003 are willing to take a modest profit instead of the monster profits we were seeing in 2004 and the first half of 2005.

Anyway, back to our discussion about the media. I believe that the media (being on the left side of the isle) were motivated to insure a Democratic Congress. Unfortunately for them at the time, things were not going to badly in this country. Of course this is all relative, but as far as the economy, things are, were, pretty strong. The media knew if they were going to affect the election they were going to have to put the breaks on our economy. The only way to do that at the time was to destroy the housing market. The housing market affects many other markets then just buying and selling houses. It affects construction workers, appliance sales people, the banking industry, rug manufacturers and so on. I think you understand. By putting the breaks on the Real Estate market they pretty much shut down a major part of our economy. Let's face it, at the time, May of 2005 was the peak, house prices were starting to level off and interest rates were still at 6%. Houses were selling in 30 days or so and the economy was strong.

In May 2005 the media made their run to alter politics. They started with the simple, "the housing bubble is going to burst". Within a few months as they hammered this home to our country, the market did start to slow. From there they took it and ran. Once they created enough data to show the market was slowing, they made it the most talked about headlines in the country. Within a year, by May of 2006 they completely destroyed the Real Estate market. Anyone trying to sell their home over the past year knows what I am talking about here.

Ok, let's fast forward to October 2007. The market is still hurting badly and there is talk of thousands of foreclosures. Many of the sales we do are "short sales". Short Sales are sales in which the seller will sell their home for less than they owe on it. They can only do this with the permission of the bank. It is much easier and less expensive for the bank to do a short sale than to go into foreclosure. Believe me, the bank does not what all those homes.

This month is supposed to be the peak of the "resets" of the adjustable rate mortgages. It will be interesting to see what is going to happen. Although with that said, Countrywide mortgage has decided to help out about 82,000 of its customers by not adjusting the mortgage at this time. This should help. I have been saying for quite a while now that if the banks don't want to go into foreclosure on these homes, they are going to have to do something about the resets. Finally someone is listening. Many more lenders are going to have to follow suit if they don't want to be handed a ton of homes.

So what am I really talking about here. The reality is if you are looking to buy a home, this is a great time to buy. If you are thinking about buying a condo, this is an excellent time to buy. There are a ton of condos on the market and they are not moving. If you are thinking about buying a piece of land, this is an awesome time to buy. I think last month out of the approximately 4100 lots for sale, only 47 sold. Lots in Palm Bay have come down from a peak of $70k to around $30k or a little more and sometimes a little less. The point is, if you need a place to live or are looking for a home you are going to stay in for a long time, then you should be very excited about the quantity of homes on the market. Think of all the choices you have to find that home you have always wanted.

As always, we are here to guide you in the process of buying a home. Since we have switched to a Single Agency (we represent you) the response has been overwhelming. Our clients love the fact that we have a legal responsibility in the transaction. It gives them a more secure feeling knowing that we are going to go the extra mile for them...you.

Have a great Saturday Night and Sunda. Go Red Sox and we can't forget to say Go Pats! It's a good time to be a Boston fan these days!

Mitch