RISMEDIA, Jan. 21, 2008- In the conclusion of this two part series, Steve Ozonian, chairman of the Board Realty Information Systems, Global Mobility Solutions, comments on the misleading, and often misinformed, media.
As another year begins, we still have many of the same questions and concerns that burdened us 12 months ago: Where is the market going? When will we see a turnaround? And, with the third quarter’s subprime mortgage debacle, 2007 also unloaded even more headaches for practitioners and unleashed even more fodder for the media to take hold of and run with.
Part II: The Market is Not Frozen
Steve Ozonian Chairman of the Board Realty Information Systems Global Mobility Solutions
The highly questioned 6% commission, the subprime mortgage meltdown, and the constant increasing foreclosure rates all qualify for topics that the media continues to have misconceptions about in the real estate industry. However, the biggest misconception the media has about the real estate industry is that the entire market is frozen. If you read the daily newspaper or watch the evening news, you think that the real estate market is frozen and stagnant across all markets, in every state, and that is not the case.
There are still 5 million residential resale transactions projected to take place in 2007, and high-end, luxury homes are still moving in many markets. Real estate is more of a micro-business than ever and thanks to increased transparency and empowerment, consumers have more tools than ever before to make good choices. These factors point to pockets of flowing real estate markets in the United States. While there is a decrease in the number of transactions overall in the industry, the good properties in the favorable locations are holding their prices and selling in increasing rates in systems like Help-U-Sell throughout local markets.
It is also a good time to buy real estate with interest rates near historical lows and that does not seem to translate in the media reports. Real estate is an important contributor to wealth and asset allocation strategies. Investing in real estate has always been positive in the long run, and will continue to be looking forward. It is just that in the past few years, residential home buyers have seen extremely favorable results in the short-term in the form of rapid increases in the home’s equity. While the shorter benefits have decreased, the long-term financial benefits of home-ownership remain.
When considering the real estate market, it is not feasible to look at it from a national perspective as the media tends to do. Real estate is and always will be local, so the generalized nationwide look can be unrealistic and uninformative since the real estate industry’s health is really determined on a market-by-market basis. For a more accurate account of your real estate market, disregard the media stories about the industry’s burst bubble and look at the local market.
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