Saturday, April 01, 2006
What's Happening with the Market?
This is the most common question I have heard since last fall. The southern California real estate market has definately changed. The question to really ask is changed from what?
Over the last several years, homes sold so quickly with multiple offers, and many sold for more than the asking price, that many people have forgot what normal market timing is. This lack of a market frenzy has many people wondering if the bubble has burst.
Nationally there are 1.2 million Real Estate Agents with the National Association of Realtors (NAR). NAR is projecting that as many as 400,000 agents will leave the business by the end of 2006. In 2005 13% of the agents sold no homes and 25% sold 1 to 2 homes. The market last year for the first 3 quarters was moving fast and furious, yet 38% of the agents were working below the poverty line.
What does this all have to do with the market? Well, what we are seeing now is normal market timing for selling a home. This normal timing is approximately 120+ days to sell a home, 30 to 60 days if the home is priced correctly. Because the time to sell a home is now back to normal, many of the agents who forgot what is was like or never knew what it was like are facing hard reality. Homes are still selling, yes there are more homes on the market, but they are still selling at a good steady pace. The bubble we are about to see is the real estate agent bubble and all these agents that have relied and built their business on the market conditions of the last several years are going to be dropping out at excellerated rates.
Over the last several years, homes sold so quickly with multiple offers, and many sold for more than the asking price, that many people have forgot what normal market timing is. This lack of a market frenzy has many people wondering if the bubble has burst.
Nationally there are 1.2 million Real Estate Agents with the National Association of Realtors (NAR). NAR is projecting that as many as 400,000 agents will leave the business by the end of 2006. In 2005 13% of the agents sold no homes and 25% sold 1 to 2 homes. The market last year for the first 3 quarters was moving fast and furious, yet 38% of the agents were working below the poverty line.
What does this all have to do with the market? Well, what we are seeing now is normal market timing for selling a home. This normal timing is approximately 120+ days to sell a home, 30 to 60 days if the home is priced correctly. Because the time to sell a home is now back to normal, many of the agents who forgot what is was like or never knew what it was like are facing hard reality. Homes are still selling, yes there are more homes on the market, but they are still selling at a good steady pace. The bubble we are about to see is the real estate agent bubble and all these agents that have relied and built their business on the market conditions of the last several years are going to be dropping out at excellerated rates.
