Is there an upside to real estate downturn ?

The current situation here in the Tampa Real Estate Market has some would be homeowners downright frustrated. Wondering when the market will bottom out so buyers can buy at the best price or for sellers wondering when the buyers will get off the fence and buy what they are selling now.

If it’s not a good time to buy then it sure has gotten a lot better to renovate or build. This time a year ago if you could find the material for a renovation it was still at a pretty high market value. Then try to even get an appointment with an architect. According to a recent Wall-Street Journal article “The Upside to the Downturn Contractors Return Calls, Materials Cost Less.. It appears that it may be a good time to:

• renovate
• be shopping for an architect
• shop for a builder

With a lot of folks from the housing industry short on work here in Florida, you can bet that you will have no problem finding a contractor to help with a home project.

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Newspaper ads for listings a dying breed

New Report by media experts Borrell Associates Inc.forecast the demise of newspaper advertising as one of the staples for Real Estate listings.

“Real estate brokers and agents will continue to devote more marketing budgets to online media. This year they will spend $2.6 billion on online media and by 2012 online will topple newspapers share“.

This is indeed interesting and backs- up what many of us in the NEW Media segment have been preaching to the old guard. There is a change in the wind and it is happening much sooner and faster than Real Estate Agents and Brokers will be happy with.

I have posted several articles over the last few weeks discussing the merits or the lack thereof, pertaining to Web 2.0 adoption by the Real Estate industry as a whole, and in particular how NAR has responded at their recent convention in Vegas. (NAR members with Ostrich syndrome on Web 2.0 ) (National Association of Realtors details 10 Year Plan)

Many in the Real Estate industry still fight this notion as one recent commenter said, “The Internet is a a powerful tool as we all know, but I don?t think we can completely discount the amount of buyers that search the newspapers still these days. The paper in my market has an excellent real estate section every Sunday. I generate a lot of calls from classified ads so I know they are still reading. You have to keep things diversified.”

While this may be true today, the statistics show a rapidly declining market for newspapers and an incremental rise in-online advertising. As the Baby Boom generation completes their last home purchases, the next generation, X, Y and ?? will be accustomed to using the Internet.

Borrell’s report also forecasts; that online advertising revenue will grow by 12.4 % in 2008 and print ad spending will continue to decline at an accelerated pace. The print advertising medium is expected to shrink by as much as 16% in 2009 increasing to 13% in 2010. Online real estate advertising will have surpassed print by 2011.

The writing is on the wall and as Zillow makes agreements with Newspaper companies for add sharing revenue it is apparent they know this too is coming.

So if you are one of the ones still sitting on the fence and wondering why you should even bother with taking your advertising online, or investing the time to learn about blogs ? I think this is your call. If this pans out, that means that you would have about 3 years to get up to speed. Meantime the early adopters will be taking valuable market share that you knowingly gave away.

Technology can be daunting, but their is a lot of help in the market with more on the horizon. If you approach the inevitable change with openness and embrace it, you will find yourself much better able to handle the questions you will surely get from prospective clients inquiring about your approach to media advertising and your online presence.

I think the days are fast approaching when simply being an expert in your area of the Real Estate community is not enough. You also have to know how to market yourself and your expertise in the new medium. Not because I or any other media pundit says you should. The real drivers for adoption will be your customers, who will demand it.

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Zillow Newspaper advertising alliance – So What ?

The press is a buzz with the news that Zillow has signed a deal with 11 major publishers that equates to 282 Newspapers.

With the new arrangement, real estate ads placed with these news papers will automatically get placement on Zillows web site.

I say so what ?

While this may be good for Zillow in raking in some cash from the Newspaper Publishing industry, Realtors can already do this from many different sources.

Savvy Realtors that have embraced Technological changes and are up to speed on Web 2.0, are doing this now. Any Realtor worth his or her salt knows that 80% of the buying market goes to the Internet first. Spending money on a dying medium like news papers is literally throwing money out the window. In the current Economic client and down turn in the market, I would put my money and expertise where it gets the best results. I am sorry but the statistics don’t-support the News Papers as a viable source for Residential Real Estate sales as they once did.

Which is interesting because in Zillows Press release they pretty much back up my comments above, but they stick to the story line that “to brokers and agents, the paper is a core marketing tool.”

“Reading the weekend real estate section is a ritual that many enjoy and to brokers and agents, the paper is a core marketing tool. Now, the process of real estate discovery will be further integrated into the online world. We are honored that this consortium of newspaper companies has chosen Zillow as the partner to fast-track their presence in the digital real estate world,” said Lloyd Frink, Zillow president. “Research shows that 80 percent of home buyers use the Internet in the home-buying process. That, combined with Zillow’s audience of engaged real estate enthusiasts, creates a huge opportunity for local brokerages looking to expand their reach online.”

How many buyers have told you that they found your listing from a News Paper advertisement or circular vs. other traditional methods and the Internet ?

While I am-sure their are some markets that will still support this model, it is a dying market segment. I think the News Paper Publishing Industry knows this and jumped at the opportunity. I would not put it past them to now raise their rates ?

Is now the right time to buy your Florida home ?

There was an interesting post today on the Inman Blog titled, “Who’s spinning whom?” that was digesting a recently written article by Dian Hymer, “Is buying a home today a good investment?” Hymer is a veteran agent in the San Francisco East Bay and has been writing a syndicated column for Inman News for many years. This article was also reproduced in several other News outlets around the country and received quite the buzz.

In the article Hymer deliberates this question she gets from today’s buyers and advises:

“Buying a home is still a good investment if you can afford it, if you are ready to put down roots in a community, and if you want to invest in your personal happiness. Profit potential shouldn’t be your only reason for buying a home, even though in most cases your home will appreciate in value if you maintain it and if you own it long enough.

“The housing market, like any economic market, is cyclical. There are periods of robust activity followed by periods of sluggishness. Prices can go down as well as up. Now that the market has softened in most areas, it’s time to look at owning your home as a way to gain control over your personal domain — not as a source of quick cash.”

This article received a lot of comments more pros than cons. There are some interesting comments, as one reader an associate political professor at the University of California in San Diego muses -

“By any reasonable measure (expected trends in prices, the ratio of rents to mortgage payments, the ratio of incomes to mortgage payments), now is a phenomenally and historically BAD time to buy. Smart buyers will wait until smart sellers lower prices to conform to reasonable income multiples.

He continues: “This is just wrong. All of the reasons to buy are made better by waiting a year or two (or more) for prices to fall. By definition, an “investment” is something that will appreciate in price or pay a dividend. Neither is expected to be true in the next few years for housing.”

You can argue this both ways all day long but the end result is, when you are ready to buy a home, buy it.

It’ s kind of like the proverbial question – “When is the best time to buy a new computer?” The answer is, “when you need it”. Due to advances in technology, what you buy today is outdated tomorrow.

This same rationale should be applied to a major decision like buying a home as well. Yes, you need to be capable of handing the financial obligations without overreaching your self to pay your mortgage and perform regular maintenance and upkeep.

Well what about my investment some inquire ?

While we all want to ensure that an investment like a home purchase is going to net us some equity in the future right ?

True, however you should not go into it with this solely as the purpose to purchase your home.

When we bought our first home I can tell you that the investment thought was secondary to our desire to have our own place to raise our family. We stayed in that first house for just a little over 10 years.

A lot of changes happened in the marketplace and when we sold, we did receive some equity but nowhere near the insane amounts that overvalued property owners were getting here in Florida. But then again a vast majority of the homes that were purchased over the last few years in Florida and elsewhere were bough for investment as the first priority.

We bought our second home this time last year in New Port Richey. A great new development and we paid pretty close to the market rate at the time. The same model is now selling for less than what we paid for.

Are we upset about it ? Yes and No. The difference now is that we have all been engaged by the media hysteria and thinking that we are loosing out because the next person got the better deal. Sellers here in the Tampa Florida Market are still holding on with a death grip on their homes price evaluations because they think they are loosing something and buyers are holding back because they of course want the rock bottom best deal they can get.

Right now the Real Estate Market in Florida is in a Stalemate. Some one has to move to keep the process momentum going forward, despite the mortgage and lending woes.

Heres a humble suggestion:

Buy your home now. Live in it and don’t worry about the Real Estate Market. It is cyclical, it will come around when you are ready to sell. After your kids have gone off to college and your now ready to move into a smaller home or you want to buy that Vacation Home at the Beach.

If your retired now and want that Home on the Beach. You may not live to enjoy it tomorrow if you are still waiting on the market recovery next month or next year.

So back to the question of topic again.

When is the best time to buy a home ?

The answer is: * When you need it. *

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Are Florida Realtors up for the challenging time ahead ?

Given all the bad press lately on the National scene as well as local numbers for the Florida Housing markets still showing declining numbers, it is little wonder that many Realtor’s in the Tampa Bay area have decided to move on to other ventures , some have had to take paying jobs in other industries and many have forgone renewing their licenses.

If sales projections weren’t bad enough for our local markets, last week we got the double whammy of two major reports indicating home prices plummeting and then the report from Realty Trac on the increase in Foreclosures going up.

Well the video clip below is worth watching. In some ways it epitomizes how many of us in the industry feel. This crazy man with a death wish has many of us thinking that we may be in the same category. But then again if you look at this from an optimistic point of view – things get really interesting.

Watch this then read my continuing comments below.

Ok, so what were your thoughts ?

This guy is one crazy dude with a death wish ?

The comparison to those that work in the Real Estate industry during these trying times is very interesting. This guys is for sure an adrenaline junkie, but one who goes to extreme lengths to ensure that his down hill need for speed is tempered with some fairly advanced preparations.

As a Realtor you need to focus on what you need to achieve success, despite the horrendous obstacles. You need to plan your days in advance, and account for your every next move. If you don’t you could risk major injury to your self esteem or your financial livelihood. Which means you crash and burn…. but maybe live another day.

If this skier makes one wrong move or hits one mogul he did not account for, he may end up seriously injured or even worse….dead.

So given the extremes it’s really not that bad now is it ?

If you thought this was another ho hum Monday in a really bad market, I hope this gives you some courage to buck the trend.

Tell yourself “your OK” and get out there and make it happen this week.

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