A Look Back On The Year That Was
I thought it might be fun to look back on real estate for 2007 and pick the best and worst things I saw in the last twelve months. Let's start with the best ...
Best Things About 2007
1. Prices Dropped. I know, if you're a seller you don't think this is such a good thing. But if you're a buyer, falling prices are about the best thing you can think of. According to all the local market experts (of which I am not one), overall prices dropped about 20-percent compared to where they were in 2006. Of course, they've dropped even more than that if you go back to mid-2005 when the real estate bubble started to burst.
2. Subprime Lending. There is nothing wrong with subprime lending. What's wrong is the abuse of subprime lending to put people into houses they can not afford. Becoming more strict with underwriting procedures is a good thing because in the long run it will restore stability to financial and mortgage markets and help cool down the real estate market.
3. Florida Legislature. Florida's property tax laws are a joke. Or a disgrace. I can't really decide which. But I have to say that one of the good things I saw this year was a lot of Floridians getting involved in the legislative process, contacting their elected officials and making it known to them that the status quo in matters associated with property tax legislation will no longer be tolerated. While I give the Florida legislature a C-minus for the legislative package that will be voted on in January, I will give them a B-plus for their effort. Some of them at least listened to what property owners were saying. Those who didn't listen will probably be voted out of office. It was one of the good things I saw this year.
4. Mortgage Stability. One of the subjects that has gone pretty much under-reported in the media has been the relative stability of mortgage interest rates this year. Big swings in interest rates are a problem for the real estate industry, but overall they've remained pretty stable.
5. Fewer Agents. Hard times means there are now fewer agents trying to list and sell real estate. That's good -- not because it means less competition for those agents who remain in the business -- but because many of those who held real estate licenses did so only because they saw real estate as a way to make a fast buck. They did not approach the business as a long-term profession but as a short-term job. That's why many of them are gone today. Those who remain are most likely career agents who have the long-term interest of their customers and the industry at heart.
Okay, those are some of the best things I saw this past year. You probably saw other things that looked good to you, and I'd like to know what they were. So, drop me an e-mail about you're thoughts when you get a chance.
Let's look at some of the dumb, rotten, silly things from 2007.
Dumb, Rotten, Silly Things About 2007
1. Stubborn Sellers. Sellers who bought property at or near the top of the market, have seen 18 to 24 months of declining prices, and still insist they can sell their property for a lot more than they paid for it top my list of bad things I've seen in the past year. Their attitude simply defies logic.
2. Whiny Buyers. For month after month we've heard buyers whine about prices being too high. Well, prices have dropped a bunch in the last year or two, and buyers still don't seem to have the good sense to make legitimate offers. What are buyers waiting for? I know -- an article on the front page of the newspaper that says "The Real Estate Market Has Bottomed Out -- Buy Now". Buyers will never see that article, and if they do it will be too late and all the good deals will be gone. Buyers need to stop whining and start buying in 2008.
3. Insurance Companies. Earlier this year they passed some laws affecting property insurance in Florida. The insurance companies are simply ignoring the laws and continue to request rate hikes and drop policy holders by the thousands. This forces the State of Florida to become nothing more than an insurance company -- an assignment for which it may not be well suited. Insurance in Florida remains one of the worst things I've seen, and at the heart of it all is plain old ordinary greed.
4. Lower Commissions. Sellers who want to negotiate lower selling fees from real estate agents must be living in Never-Never Land. Sellers need to understand that if they want to sell their property in today's oversaturated real estate market, they have to provide a financial incentive for agents to show the property. Some people seem to have a problem understanding this theory. Perhaps they would understand it better if it came from somebody like Bobby Bowden. I can just hear the coach now: "Listenup, dadgumit. Cutting the dadgum commission means you cut the dadgum incentive and agents won't show your dadgum property. Dadgummit."
5. Rental Market. How many times have sellers said this in the past year: "We'll just rent it until the market turns around." Sure. The rental market is oversaturated too. Way more rental units available than people to rent them. Rental rates are falling, just like selling prices. Really, you might be better off selling for a loss and getting out from under. Just a thought. But the collapse of the rental market is one of the worst things I've seen this year. It's just something else we can blame on rampant speculation.
6. Rippling Effect. We now see that the drop in the real estate market is having a negative effect on the entire U.S. economy. If it effects the U.S. economy, it will effect the world economy. This rippling effect is one of the most dangerous things I've seen all year, and I worry a lot about what might happen next year to all of us -- even those who have nothing to do with real estate or its associated industries. Does the word "recession" have a familiar ring to anybody?
Well, it was an interesting year. I hope next year will be better for everybody, and I've got my fingers crossed. And my toes.
For more information about real estate in the Tampa Bay area, please visit my website at http://www.thestpeterealestatesite.com/.
Best Things About 2007
1. Prices Dropped. I know, if you're a seller you don't think this is such a good thing. But if you're a buyer, falling prices are about the best thing you can think of. According to all the local market experts (of which I am not one), overall prices dropped about 20-percent compared to where they were in 2006. Of course, they've dropped even more than that if you go back to mid-2005 when the real estate bubble started to burst.
2. Subprime Lending. There is nothing wrong with subprime lending. What's wrong is the abuse of subprime lending to put people into houses they can not afford. Becoming more strict with underwriting procedures is a good thing because in the long run it will restore stability to financial and mortgage markets and help cool down the real estate market.
3. Florida Legislature. Florida's property tax laws are a joke. Or a disgrace. I can't really decide which. But I have to say that one of the good things I saw this year was a lot of Floridians getting involved in the legislative process, contacting their elected officials and making it known to them that the status quo in matters associated with property tax legislation will no longer be tolerated. While I give the Florida legislature a C-minus for the legislative package that will be voted on in January, I will give them a B-plus for their effort. Some of them at least listened to what property owners were saying. Those who didn't listen will probably be voted out of office. It was one of the good things I saw this year.
4. Mortgage Stability. One of the subjects that has gone pretty much under-reported in the media has been the relative stability of mortgage interest rates this year. Big swings in interest rates are a problem for the real estate industry, but overall they've remained pretty stable.
5. Fewer Agents. Hard times means there are now fewer agents trying to list and sell real estate. That's good -- not because it means less competition for those agents who remain in the business -- but because many of those who held real estate licenses did so only because they saw real estate as a way to make a fast buck. They did not approach the business as a long-term profession but as a short-term job. That's why many of them are gone today. Those who remain are most likely career agents who have the long-term interest of their customers and the industry at heart.
Okay, those are some of the best things I saw this past year. You probably saw other things that looked good to you, and I'd like to know what they were. So, drop me an e-mail about you're thoughts when you get a chance.
Let's look at some of the dumb, rotten, silly things from 2007.
Dumb, Rotten, Silly Things About 2007
1. Stubborn Sellers. Sellers who bought property at or near the top of the market, have seen 18 to 24 months of declining prices, and still insist they can sell their property for a lot more than they paid for it top my list of bad things I've seen in the past year. Their attitude simply defies logic.
2. Whiny Buyers. For month after month we've heard buyers whine about prices being too high. Well, prices have dropped a bunch in the last year or two, and buyers still don't seem to have the good sense to make legitimate offers. What are buyers waiting for? I know -- an article on the front page of the newspaper that says "The Real Estate Market Has Bottomed Out -- Buy Now". Buyers will never see that article, and if they do it will be too late and all the good deals will be gone. Buyers need to stop whining and start buying in 2008.
3. Insurance Companies. Earlier this year they passed some laws affecting property insurance in Florida. The insurance companies are simply ignoring the laws and continue to request rate hikes and drop policy holders by the thousands. This forces the State of Florida to become nothing more than an insurance company -- an assignment for which it may not be well suited. Insurance in Florida remains one of the worst things I've seen, and at the heart of it all is plain old ordinary greed.
4. Lower Commissions. Sellers who want to negotiate lower selling fees from real estate agents must be living in Never-Never Land. Sellers need to understand that if they want to sell their property in today's oversaturated real estate market, they have to provide a financial incentive for agents to show the property. Some people seem to have a problem understanding this theory. Perhaps they would understand it better if it came from somebody like Bobby Bowden. I can just hear the coach now: "Listenup, dadgumit. Cutting the dadgum commission means you cut the dadgum incentive and agents won't show your dadgum property. Dadgummit."
5. Rental Market. How many times have sellers said this in the past year: "We'll just rent it until the market turns around." Sure. The rental market is oversaturated too. Way more rental units available than people to rent them. Rental rates are falling, just like selling prices. Really, you might be better off selling for a loss and getting out from under. Just a thought. But the collapse of the rental market is one of the worst things I've seen this year. It's just something else we can blame on rampant speculation.
6. Rippling Effect. We now see that the drop in the real estate market is having a negative effect on the entire U.S. economy. If it effects the U.S. economy, it will effect the world economy. This rippling effect is one of the most dangerous things I've seen all year, and I worry a lot about what might happen next year to all of us -- even those who have nothing to do with real estate or its associated industries. Does the word "recession" have a familiar ring to anybody?
Well, it was an interesting year. I hope next year will be better for everybody, and I've got my fingers crossed. And my toes.
For more information about real estate in the Tampa Bay area, please visit my website at http://www.thestpeterealestatesite.com/.
-30-
posted by Terry Ward at 6:47 AM
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