Commentary by Walt Baczkowski
RISMEDIA, August 5, 2008-At the top of the most frequently asked questions’ list is, “How will we know when the market has ‘bottomed out’ and we should buy a home?”
Historically, two major indicators that a market has bottomed out are: a decline in the number of listings and an increase in listing and sold prices. Obviously the key here is making your move at the right time-which would be right before these two items begin to manifest in the market.
Based on sales data provided by MLSs, it appears that we are beginning to realize a slight decline in listing volume. I say “appears” because with the factors affecting the market today-and the foreseeable future-this may be a seasonal issue or being caused by any number of things.
Tracking the listing volume over the next several months will provide additional information regarding this question. In regard to sold prices, this is more difficult. Real estate-owned property or property in some stage of the foreclosure process has been driving the price point for real estate for some time now.
With a significant volume of lending institution-owned property on the market selling at what historically, could be viewed as discounted prices, we do not anticipate seeing an increase in sales prices in the near future.
With sales showing increases compared to last year in most areas and declines in listing volume, it would appear that the market is slowly changing from the buyer’s market we have experienced for the past several years.
A large listing inventory remains, however, and problems in the job sector-coupled with rising fuel costs and the overall economic state in the country-will undoubtedly prolong the market conditions we are currently experiencing.
During this time, we are also seeing a plethora of innovations and new ideas coming forward. We all need to do something that differentiates us from our competition. New services and products have continued to be introduced over the past few years, only to fail shortly thereafter or morph into something entirely different.
However, a point to keep in mind is that self respect and common sense should remain at the top of everyone’s list. This has been-and remains to be-the basis of business success.
Walt Baczkowski is president of the Metropolitan Consolidated Association of REALTORS®.
To contact him, please e-mail firstname.lastname@example.org.