I spent the weekend in Louisville KY talking about real estate and the impact of the media on the publics perception of how things were doing with regards to home sales.
I know things must be improving in the market just because when anyone fom the local media calls for a quote on the state of the Nashville real estate market the first thing they say is "How good is the market right now?" This is actually a subtle difference from only a few months ago when the question was more like "how bad is the market right now?'
The slightly loaded question in the past was looking for a doom and gloom story about the collapse of the real estate market and all the mortgage issues in addition to all the economic woes. This type on questioning tended to produce negative stories that then reinforced the publics perception of how bad things were when it came to real estate sales.
Now that the atmosphere has changed a little and there is a genuine feeling of optomism about the market making a comeback. The stories that the local media, and press have been focsing on now, tend to be cautiously optomistic with a view to the positive activity in the real estate market.
In Nashville, I talk to my agents and I can see by the number of closings, that activity has picked. However, it's when I attend some of the Realtor functions, such as the Williamson County Association of Realtors Bowties and Blig event last week that I get to meet some of the other realtors from the Nashville area.
When all of the realtors start to tak about their experiences with multiple offers numerous times it helps to change the mindset of the actual realtor who can then pass on this experience to their customers.
Clients may not believe their realtor at first but when the client that has an offer that loses out to another stronger offer than there is now a renewed determination to make sure they offer the right price to guarentee them getting an accepted offer.
This talk amongst realtors of the improving maket is also a reflection of the number of clients that have decided to come down off the fence and actually seriously start looking at homes. These are the buyers that have been watching the media for the last few years and have felt that it wasn't the right time for them to even consider buying a home. However, as they interest rates have remained so low for so long, and the home prices have remained lower than in 2007 then the buyers start to think that it's time to consider buying a home. This seems to happen collectively amongst all the buyers that have been sitting on the fence and it gives the impression that the nation of potential home buyers are all on the same bio rythmn and now the number of serious buyers looking for homes has had a marked increase.
The other side of the story is the sellers. The negative real estate stories and talk from realtors about the past few years being a terrible market for sellers effectively curbs the desire of people who would like to sell, but don't have to sell, so they just decide to not even bothering to list their home as they know that the probable sales price will be under their comfort zone.
So as sellers deicde to take their home off the market, or not even list the home, the end result is that the people that had to sell ended up selling their homes but at a reduced value which sent the overall property values down. This downward pressure was enhanced by all the foreclosure properties and short sales that sold at below the market values of 2007. This then create the buyers market and as a result the buyers for the last few years have been getting homes at the new market price that represented great values for the buyers.
As the inventory of homes was being absorbed by the home buyers, the level of new homes being listed was greatly reduced. The number of new homes being built has also been reduced greatly for the last couple of years so now the over all supply of homes available for sale has been reduced.
So the start of the potential sellers market has begun. The number of home for sale has been reduced, the number of qualified buyers has been increased, which means that the demand for homes has increased which will ultimately result in more buyers making offers on the same property, which turns in to multiple offers which means the buyers that lose out then become more determined not to lose out on their next offer.
Hopefully we'll see this change from the buyers market to sellers market all across the real estate markets of the USA and as a result we'll see the economic indicators all start to show the positve results and as a result see an overall economic revival for the USA!