THE MARSHALL- FRASER GROUP

THE MARKET ACROSS THE NATION

     Since I wrote the last article I’ve been to San Diego and back and Philadelphia and back. In San Diego, my wife and I attended a National Real Estate Convention. I had the opportunity to talk with Realtors from across the country and Canada. At these National Conventions you have the opportunity to talk with the leaders of the industry. Typically these leaders have spent many years in the industry and you know you can put value into their insight.

     What came out of the National Convention in San Diego is that the market is slowly turning around in almost all the markets in this country. There are pockets such as southern Michigan that do to the automotive industry will be in the toilet for years to come. However on the other hand you have places like Calgary that had their home prices soar 45% last year. To a person that I spoke with, it’s the investors that are reappearing first in this market. It’s a real shame because the end user’s are the ones that can really benefit from this current market. The problem is the end users don’t get a chance to talk to industry leaders and as a result end up listening to those marginal Realtors I addressed in my last column.

     Let me give you an example of what I mean. This morning at my gym I had the opportunity to talk to a lady that has worked out beside me for years and reads my columns and we talk about them often. This morning she told me she disagreed about my statement that prices have not come down. She went on to say the several Realtors have told her they have come down 20%. That is NOT the case. Listing prices, NOT sold prices have come down. If you were to go to the public records and check on a sale of a particular home in July of 2005 at the high end of the market, and then check on an almost identical home that sold a month ago you would see that we haven’t had a very big decrease. You have to take out of the equation the desperation sales, such as my father in law wants to do. Four years ago he paid $250,000 if he put the home on the market and let it run the course he would get around $500,000.00 however he’s prepared to take $350,000 to dump it. His case is a desperation case. He’s 87, his wife just passed away and he has another large home in St Louis. In July of 2005 he could have listed the home for $600,000. This is a good example of the listing prices coming down 20%, not the sales process. With that said I have to believe that 90% or better of the home sellers are not desperate and can afford to wait the next 18 months until the Nat ional comment is the market is on the rebound. We will linger a little longer than the rest of the nation simply because of our excessive inventory. 

     Also at the gym I had the opportunity to talk with one of this area’s top Bankers. A very successful banker I might add. At the same time I was also talking with the head of a Hugh National Title Insurance company that oversees most of the Title Insurance for his company in Southwest Florida. They both agree with my assessment that Real Estate will be back sooner than most people believe and that the investors are already reappearing. I also spoke with a Realtor at the gym that said he sold two homes last week, both to investors.

     A day after we got back from the National Convention I was back on a plane to meet the immediate past President of ( NAHREP ) National Association of Hispanic Real Estate Professionals. We got into the discussion of the subprime home loan issue. Appartantly even though the Hispanic population of this country is only 14% almost 40% of the defaults on these subprime home loans are minorities. Even though most of these minorities speak English, they aren’t that comfortable with the legal language in  loan document and basically were taken advantage of by some very unscrupulous lenders, and believe me after all these years in the business,I know there are some unscrupulous lenders out there.

 this week  a columnist reported that we have 20,000 homes for sale in the county. The  columnist that made this  remark included all proposed homes that haven’t been built yet. The developers of these proposed homes bought the land for these homes at yesterday’s prices, some sales were years ago. They’re now putting in the infrastructure at today’s prices, and will wait to build until the market improves for addition inventory, which is another 3 years away. I just don’t believe with the current inventory level that they will choose to build thousands of homes now. Once our naysayers realize that the buyers are waiting to hear the bottom has passed they will be back.

     Next week we hope to meet with the President of ( NAR ) the National Assiation on Realtors in Chicago. Any insights I get from the meeting I will be happy to share with you the readers. My biggest advice right now is if you ever dream of owning in this area, if you ever dreamed of owning a waterfront property, if you ever dreamed of moving up into a larger home, do it NOW, or else the investors will end up with all the good buys and you’ll be buying when the prices are on the way back up. I also want to thank the Charlotte Sun for allowing me to share my thoughts with you.