Real Estate Agents are a silent force that fights for freedom.  Real Estate Agents are the most independent working people on earth with more opportunity to earn an exceptional income despite limited formal education or professional background.  (Please do not confuse formal education with intelligence.  Mark Twain’s expression is wholly embraced by many of the most successful Real Estate Agents, “I never let my schooling interfere with my education.”)

The ranks of Real Estate Agents are filling with more and more young people who are smart, educated, and committed to a successful career in Real Estate.  The first generations of Real Estate Agents that left or graduated from college to sell Real Estate are transforming the profession.  It is tempting to think that it is their comfort and embracing of technology that is their strength.  That is only one equal part.  As strong as their facility with technology is, their commitment to the business as a career decision and their continuously seeking better business practices.

The youth and their commitment are not the strongest force leading the economic recovery.  The experienced professionals who have succeeded through recessions in the 90’s, the 80’s, and even the 70’s (still some of them around), these veterans of previous difficult markets realize that the downturn is temporary and on the other side is a strong, healthy market. 

In August of 2008 an article of mine (We’ve Hit Bottom… Hooray!) was widely published in which I wrote, “In the hardest hit markets that experienced the greatest price declines … may take another twelve months for enough of the excess inventory to be absorbed for those markets to experience growing appreciation.  On the other hand a rapidly growing number of buyers are coming back into the market anticipating that the bottom may have arrived.  These buyers are getting great values while they are absorbing the inventory.  These buyers are actually creating the future value increases that they perceive. 

Let’s be realistic.  Things don’t turn completely around in one year.  We are not going to immediately, see the kind of demand and seller’s market that create double-digit appreciation this year (2008).  We will see the end of price depreciation and mild growing appreciation in market after market.

As one market after another recovers there will be increasing appreciation.  In your market sometime between 2009 and 2011 you will see another seller’s market.  In the hotter markets you will again see double-digit appreciation.”

The above article was written before the foreclosure bombshell and the banking crisis.  It is amazing to me that despite the tremendous numbers of foreclosures, the Ponzi scheme victims, and the extent of the banking crises have not delayed the residential Real Estate recovery.  The time frame prediction of the above August 2008 article is still on track. 

It is obvious that residential Real Estate leads the economy. Bad residential lending took this economy down. It is the active Real Estate market this spring in most markets that will bring it back.

You will hear the stimulus package and all kinds of other reasons for the end of the recession. That is political spin.  Notice that the health of the residential Real Estate market precedes and leads the recovery.

How can that be?  Because each time a house sells, tens of thousands of dollars go directly into the local marketplace for both closing costs and home improvement.  The fact that this happens in every community across the country makes it obvious that residential Real Estate has the strongest and most immediate influence on the economy.

Thank goodness that the NAR lobby was strong enough to get the residential benefits of the stimulus package to the Real Estate market immediately. 

Young and old, rookies and the most experienced, you as Real Estate Agents are doing more for recovery by honestly and optimistically matching Sellers and Buyers; and making this a strong spring for yourselves.  It is pretty cool, (a reflection of my age) that you can do something so good for you and your family and it is the best possible thing you could do for the recovery, the economy and the country. 

Rich Levin is a National Real Estate Authority with over 30 years experience; the last 15 dedicated to coaching and speaking.  His specialty is in raising Agent Production while improving quality of life.  He has spoken in 38 States at events from small offices to the NAR convention. Join our Success Community to receive more articles, tips and information. Contact us at 585-244-2700 or visit http://www.RichLevin.com.  

by Rich Levin

In a CNN interview Warren Buffet was talking about coping with the current economy. He said, “If you are fearful and confused, you don’t get over being fearful until you get over being confused.”

This speaks directly to the role of Real Estate Agents, Brokers, and all of us in the profession who are actively working with the public or Agents. Our role is to reduce and eliminate the confusion in our Clients, our spheres of influence, and everyone that we encounter. Reduce and eliminate the confusion so that our public is able to reduce and eliminate the fears they have in this economy. 

Accurate information eliminates confusion. When a person is driving at night in an unknown area and finds themselves lost and confused, a GPS, a map, or a person giving directions provides accurate information and eliminates the confusion. Immediately, as the confusion dissipates, the information begins to reduce the fear. 

Accurate information about the values in your community, the availability of mortgage money, the inventory, number of sales along with a few words of honest interpretation reduces the confusion to your public in two ways. First, the information by its nature reduces confusion. Remember, you may still be in a strange place but when you know where you are, you are less fearful than if you are lost. Second, when your public knows that they can depend on you for accurate, honest information they are less confused and less fearful because they have you as a source of accurate information on which they can depend. This liberates them from their fear to once again make plans about their Real Estate needs and look to you to fulfill their plans. 

You become the honest expert to your public. When you are the source of reducing confusion and fear you accomplish the ultimate goal of personal marketing. You are top of mind in the category of Real Estate.  When they think Real Estate they think of you (with confidence and comfort). When they think of you they think of Real Estate with more confidence and comfort. 

Many markets around the country are experiencing a strong early spring market. Buyers are active. In some areas the inventory of salable homes is low and it is looking and feeling a lot like the early stages of a Seller’s market. In these areas in addition to being the “Honest Expert” I have been teaching Real Estate Agents to be the “Optimistic Expert.” 

In healthier markets, and there are many of them this spring, convey the message that despite the negative economic conditions in many sectors, residential Real Estate is very healthy. Convey that Real Estate has led the economy into and out of its past two recessions. It led the economy into this one and is very likely to lead the economy back to health. In fact, as I write this (3/09) it looks very much like that is happening in many markets

Convey that there has not been a better time for first time Buyers to buy, in decades. The same is true for homeowners moving up from healthier, modest price ranges to softer higher priced homes in the same metropolitan areas.  Investors, who have financing, are finding incredible opportunities that are not often seen.

When an Agent gets one of the inevitable questions, “How’s Real Estate?”  “How’s the Real Estate market? Or, “How’s business?” Answer honestly and optimistically, “Some segments are soft but there is tremendous opportunity for first time home Buyers, a lot of people wanting to move up and investors are finding fabulous opportunities. Are you thinking about doing something, or know someone who is?”  Be the honest and/or optimistic expert. 

In every conversation, presentation, communication, and marketing material, in print and online, talk about and write about the honest scenarios, with intelligent insight, that is likely to help people be more confident, less confused, less fearful; that is likely to help people decide that it could be a good time to buy or sell.

There is no greater way for you and us in Real Estate to contribute to the health and recovery of this economy. There is no better way for us to contribute to the speed of recovery out of this recession than to reduce confusion and fear; by actively being the optimistic and/or honest expert to our public. 

There is also no better way for an Agent to be more successful in this market; no better way for an Agent to achieve his or her own optimism. As Marianne Williamson wrote in her poem that Nelson Mandela read in his inaugural speech “As we are liberated from our fear, our presence automatically liberates others.”

Let your light shine. 

To do our part I am conducting free live webinars every weekday morning at 8:45 am EST to motivate Agents across North America, lead them to eliminate confusion and reduce fear in their work and their lives; so they can be motivated and reminded every day that they have tremendous influence on the thinking and behavior in their marketplace. And that collective influence can have a direct and significant effect that ripples through the entire economy. (www.1stFifteen.com)

Rich Levin is a National Real Estate Authority with over 30 years experience; the last 15 dedicated to coaching and speaking. His specialty is in raising Agent Production while improving quality of life.  He has spoken in 38 States at events from small offices to the NAR convention.

Join our Success Community to receive more articles, tips and information. Contact us at 585-244-2700 or visit http://www.RichLevin.com.

By Rich Levin

This is the type of Real Estate market that two years from now everybody is going to say, “I wish I had bought then.” All the factors are lining up for the next six to twelve months to be that year. Let’s look at those factors. 

Financing

Interest rates are dropping below 6% on residential mortgage loans. Rates are seldom that low and when they have reached that level, mortgage loan rates do not stay there for long. According to HSH Associates, the nation’s largest publisher of consumer loan rates (HSH.com) from mid 2003 through mid 2005 rates hovered just above and below the 6% threshold, never below for more than a few months. Before that they had not been below 6% for forty years. The most likely conclusion is that mortgage loan rates will not stay below six for long. So, Buyers would be wise to be actively looking to buy and take advantage very soon. 

Mortgage money is available. Real Estate Agents and mortgage brokers from coast to coast are all telling me that there is money available with five percent down or less. The Buyers do need to have steady employment, and a reasonable credit rating. The days of Buyers needing to prove employment, have some cash on hand and credit worthiness have returned for good, hopefully. Violating those obvious principles contributed enormously to our current global financial crisis.

Requiring stability of employment, credit and some cash is not the banks being cautious. It is the way lenders have made decisions since paper money was invented. The last ten years when those fundamentals were ignored have been the exception. Bottom line, solid Buyers can get the best rates and buy at what I believe is at or near the bottom of the market.

Inventory, Foreclosures and Pricing

New home inventories are being absorbed. According to HWMarketIntelligence.com “the number of new homes for sale continues to steadily decline and have not recorded a monthly increase since May 2007.”  According to the Mortgage Bankers Association the number and rate of properties entering foreclosure is slowing. 

My anecdotal research from my Real Estate Agent Clients around the country is that the foreclosure properties are being purchased at a much higher rate as first time home Buyers and investors in market after market are deciding that we are near enough to bottom.

This Buyer and investor activity will create its own momentum. As more Buyers and investors choose to buy now the demand they create will stabilize and lead to market appreciation. Did people who bought at the height of the boom in late 2005 and 2006 lose equity? In most markets yes, in some markets they lost a lot. Are the Buyers who buy over the next year likely to be buying at the bottom of the market and benefit from excellent appreciation?  Every indication that I see says yes. 

As Real Estate Agents you need to decide if you are comfortable recommending that this is the time for Buyers to buy, that prices may be at or near the bottom. I suggest that we are at or near the bottom and the Buyers you encourage to buy over the next twelve months will be forever grateful for your advice.

Some Considerations

The Real Estate market, specifically for residential homes is typically not a speculative market. The vast majority of people buy a house to live in it as their home, not to resell it for a profit. Over the last forty years Buyers have come to expect that their home will build equity and appreciate in value. But, the decision to buy is usually based on factors other than anticipated appreciation. The Buyers you encourage to buy want to own the space in which they live. The fact that this is a fabulous time to make that decision just makes your job easier. 

Second, there is a continuous demand in most markets. People graduate from school, get better jobs, get married and divorced, have children, upgrade and downsize, among dozens of other reasons that new Buyers come on the market. These life events keep occurring. However over the past two years these Buyers have paused. They still want to buy but they are waiting. Historically when there is a time that Buyers are reluctant to buy for any reason this creates a pent up demand. 

As Buyers realize that it is a good time to buy but not necessarily for Sellers to sell; demand will begin to absorb and exceed supply. Over the next year or two the additional demand is likely to lead to a Seller’s market. Because of the severity and magnitude of the current housing supply this turn to a Seller’s market will likely be gradual. 

The signs of this shift are occurring now, that is, the supply of new construction and foreclosure homes are being absorbed by first time Buyers, investors, and secure homeowners taking advantage of their financial strength. This spring may be the tipping point when market activity flourishes. I believe it will.  

Inflation: The X Factor

I remember a rapidly inflationary period. I remember it for a funny reason. I used to drink a lot of Coca Cola. One day when I put a quarter into the machine to vend my Coke I realized that it was going to cost me forty cents. Soon after that it was fifty cents and within five years it was seventy five cents. Now it is at least a dollar. This is inflation. Your money buys less and the cost of what you buy increases.

If you owned Real Estate during this same period you were very happy because the property you owned in 1981 also doubled in price or more by 1986. That is true even if you didn’t live in a highly populated area. This inflationary period did not discriminate by locale. 

Are we on the verge of another inflationary surge? I don’t know. I have been reading what I can find on this and it seems to be a largely ignored topic. I notice that gas prices are declining but not much else. I think about the trillions of dollars worldwide being spent on the bailout. The definition of inflation is when the amount of money in circulation increases and the available goods decreases. It seems to me that is what is happening. 

If inflation does devalue our money then house prices, along with the price of almost all other hard goods will increase and this year’s Buyers are going to get benefit tremendously. Whether this happens or not it is time for buyers to get in the market. 

First Time Buyers and Investors

For certain Buyers it is time to get active. I am saying to anyone and everyone that will listen. FIRST TIME BUYERS THIS IS YOUR TIME! The federal government is still offering a $7,500 tax credit that is scheduled to conclude in the summer of 2009. Prices and interest rates are down. If you are employed and credit worthy you can buy with a small amount of cash out of pocket. FIRST TIME BUYERS THIS IS YOUR TIME!

Another group that I am encouraging to buy now is investors of residential rental property. Investors still have to do their investment analysis. They still have to carefully look at occupancy and vacancy rates.  In other words, investors have to make smart, calculated buying decisions. This is always the case.

The reason it is a good time for these investors is because the market is soft. As long as there has not been a population exodus in your community, that is, as long as people are choosing to live in your community and employment is stable, the rental property is going to sustain value. At the same time market conditions right now, with more challenging underwriting standards and only those who really need to sell putting their property on the market creates the opportunity all investors are looking for, buy low, particularly those with some cash. 

Get in the Game

So, I have been telling my Agent Clients and my audiences to shout from the rooftops that first time Buyers and investors should get in the game. Call the people in your spheres of influence and your past Clients and be honest with them about whether it is a good time to sell. 

At the same time encourage them to tell their relatives, friends and any one that they care about that if they are first time Buyers to call you and start looking. If they are investors with some cash suggest that they start looking for golden opportunities with you.

Look for articles from legitimate sources about what is going on with the global financial crisis. But then look at your local market and discover the opportunities for first time Buyers, investors or any other group or type of property that may be a shining beacon through the fog.

Be the optimistic and intelligent voice of opportunity and you will both survive this market you will become a roaring success as the market improves; which it will. When? For most markets, the prediction is late 2009. For some it will be spring of 2009 and for others it will be longer. 

I have led Agents to success in four of these major shifts since 1979. Every one of these soft markets creates strength in those that survive it. And those who survive it by discovering the opportunities for their Clients become the highest producers and the leaders of the healthy market that is likely to be just around the corner.  

Rich Levin is a coach and speaker whose focus is teaching Agents to achieve their highest level of production with a better quality of life.  Rich is presenting a workshop titled “Survival of the Prepared, Adapting to Changing Markets” at the NAR Convention and in dozens of other Associations, Franchises and Brokers across the country. For Information contact Rich at 585-244-2700 or visit http://www.RichLevin.com.

Ask Rich a question at http://www.AskCoachRichLevin.com